Wholesale prices have rebounded sharply—has spring arrived for baijiu?

Yesterday, after five consecutive years of declines, the baijiu sector saw an explosive surge. Kweichow Moutai soared over 8%, and several stocks including Wuliangye hit their daily limit. The core indicator that the market is watching—Feitian Moutai’s spot price—rapidly rebounded from around 1,500 yuan to nearly 1,700 yuan within one week, providing crucial support for this rally. According to reports issued yesterday by China Merchants Securities and Guotai Junan, **this rally was not a broad increase driven by sentiment, but the result of fundamental data combined with an extremely polarized institutional holding structure.** There are two main factors: first, **Moutai’s sales data defied the trend and grew over 15%,** directly disproving the market’s previous pessimism about a price collapse; second, **institutional holdings have dropped to a historic low of 3.5%,** and these low positions triggered a panic buying effect amid positive catalysts, creating a “short squeeze.” The report noted that **the current rally is a sharp “K-shaped” divergence.** **Apart from leaders like Moutai and Wuliangye, the industry’s cold winter is not over.** Channel data showed that some core products of brands like Luzhou Laojiao and Gujing Gongjiu experienced a sales decline of up to 20-30%, highlighting a significant “top-heavy” industry pattern. On the macro level, marginal adjustments to real estate policies and the “15th Five-Year” strategy to boost domestic demand have provided a macro background for valuation recovery in the cyclical baijiu sector. For investors, although bottoming signals have emerged, this is not a full bull market. Strategy should focus tightly on the main line of differentiation—giving priority to Moutai (strong in both sales and price) and Wuliangye (fundamentally solid); for sub-high-end brands with stagnant sales and high inventory, caution is warranted regarding risks to earnings after a rebound. ## Liquidity and Macro: Underweight Positioning Meets Policy Shift The rare surge in the baijiu sector yesterday was **essentially the result of extremely clean capital structure, marginally warming macro policies, and the dividends from market-oriented reforms at leading companies.** From the funding perspective, the sector’s capital structure is now very clean. Institutional holdings remain at the historic low of 3.5%, flat month-on-month, meaning potential selling pressure has faded sharply. In this context, any marginal positives can trigger significant upward price elasticity. On the macro front, the real estate sector—a key correlate for baijiu demand—is seeing policy easing. Regulators no longer require major property firms to report the “three red lines” monthly, and officials have stated they will “shorten the adjustment period as much as possible.” This policy pivot gives baijiu’s cyclical sector essential support for valuation recovery. Moreover, internal reforms at leading companies are producing dividends. Since December 2025, Moutai’s strategy for market-oriented transformation (covering product, pricing, and channel) has started to deliver. Channel innovations like the launch of regular Feitian Moutai on the “iMoutai” platform have successfully stimulated incremental mass consumer demand, becoming key micro-drivers for beating fundamental expectations. ## Moutai “Volume & Price Up”: 1,700 Yuan Marks the Bottom The market's biggest previous worry—**Moutai’s price system collapse—has been forcefully refuted by the latest channel data.** The core evidence is seen across pricing, sales, and demand structure. First, **price has shown strong resilience.** Moutai’s spot price climbed sharply from a phase bottom around 1,500 yuan. Research from China Merchants Securities shows the price has risen to close to 1,700 yuan, while Guotai Junan further notes that on January 29, market trading price had surpassed 1,700 yuan. The short-term supply-demand situation is tight, supporting a trend for robust price increases. Second, **sales data far exceed market pessimism.** While overall baijiu industry sales are generally declining by double digits, Moutai’s sales growth in several key markets defied the trend with an increase of more than 15%, a significant deviation from the industry trend. Finally, **demand structure has undergone profound changes.** Direct sales channels like “iMoutai” offer official pricing at 1,499 yuan, substantially boosting real mass consumer demand. Data show the proportion of mass consumption demand has surged from single digits to above 20%. In January alone, “iMoutai” is expected to contribute more than 1,500 tons of pure incremental volume, forming the key engine for double-digit total demand growth. ## Apart from Moutai and Wuliangye, Industry-wide Sales Decline by Double Digits **This rebound is not a sign of a full industry recovery—except for Moutai and Wuliangye, the baijiu sector’s winter continues.** Latest channel research data reveals an extremely stark pattern of brand divergence. Wuliangye’s performance is relatively stable, with year-on-year sales growth, normal shipping progress, and reasonable channel inventory. In sharp contrast, **other brands face severe pressure.** Luzhou Laojiao saw sales decline 20-30% in key markets like Sichuan, with inventory rising to 2-3 months. Gujing Gongjiu is experiencing structural deterioration—its core flagship “Gu 20” dropped nearly 20% in sales; “Gu 5” and commemorative editions also declined, only “Gu 8/16” series remained stable. Even more severe, the sub–premium price segment has become the hardest hit. Shede Spirits faces nearly 20% decline in the 2026 market; Qinghualang and Jiannanchun saw high single-digit sales drop, and Yingjia Gongjiu’s Dongcang 16/20 and other products are also falling noticeably. This clearly shows that **the industry is displaying extreme “top-heavy” concentration.** Market share, cash flow, and consumer awareness are quickly converging toward absolute leaders like Moutai and Wuliangye, whereas many companies lacking brand moats and channel control are being passively forced out in a tough process. Risk Disclaimer and Limitations of Liability The market carries risk and investment requires caution. This article does not constitute personal investment advice, nor does it consider the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions herein apply to their individual circumstances. Proceeding with investments is at one's own risk.