Wisdom Finance APP learned that Guolian Securities released research reports stating that the fundamentals of the liquor industry in 2024Q3 are still bottoming out in the short term, there is still pressure on short-term receivables, business demand is still under pressure, and consumer demand is stable. With the successive introduction of macro policies, pessimistic expectations in the medium term for the baijiu sector may continue to improve, and short-term performance impact is expected to fade. In the long term, the driving force of the baijiu industry gradually shifts from the demand side to the supply side, and there is still significant room for concentration improvement. The cost dividend in the beer sector continues, with a further decline in the base, demand is relatively weak, leading companies are under slight pressure in both volume and price, and performance is slowing down.

Guolian Securities' main points are as follows:

Baijiu: Pressure on the financial statements of the baijiu sector in 2024Q3 is accelerating the release, and industry growth is slowing down.

The overall method calculates the revenue growth rate of key companies in the baijiu industry for 2024Q3 at 2.41%, with high-end liquor / second high-end liquor / regional liquor revenue growth rates of +9.59% / -0.38% / -15.64% respectively, with sequential declines of 4.65 / 8.87 / 23.32pct. The net profit growth rate attributed to the sector for 2024Q3 is 1.80%, slightly slower than the revenue growth rate, with high-end liquor / second high-end liquor / regional liquor net profit growth rates of +9.19% / -2.04% / -31.64%. High-end liquor shows steady growth, with strong resilience; second high-end liquor differentiation intensifies; regional liquor slowdown is significant, with Gujing / Laobaigan meeting expectations, while Yingjia / Jiangsu King's Luck / Anhui Kouzi / Jiangsu Yanghe falling below expectations.

Baijiu: In 2024Q3, most liquor companies had slower returns than revenue, and the quality of financial statements declined.

The overall method calculates that the revenue of key companies in the baijiu industry for 2024Q3 (revenue + Δ contract liability) decreased by 3.39% year-on-year, with high-end / second high-end / regional liquor (revenue + Δ contract liability) decreasing by -0.93% / +5.13% / -14.92% year-on-year respectively. The overall method calculates that the sales receipts of key companies in the baijiu industry for 2024Q3 increased by 1.50% year-on-year, with high-end / second high-end / regional liquor sales receipts increasing by +3.82% / +12.34% / -10.93% year-on-year. Most liquor companies had slower returns than revenue, Wuliangye's cash receipt performance was good, the bank believes the main reason lies in the full maturity of acceptance bills in Q3 during the Spring Festival peak season, and the actual pressure on terminal sales and channels for liquor companies remains significant.

Baijiu: The product structure upgrade slows down in Q3 2024, and the sector's gross margin remains basically flat.

Impacted by the macroeconomic environment and consumer power, the peak gifting season and weak business scenarios in Q3 2024 led to weaker consumption of high-priced liquor. The upgrade of liquor companies' product structures slowed down, coupled with increased free gifts and discounting, resulting in the sector's gross margin basically remaining unchanged. Calculated by the overall method, the key companies in the liquor industry in Q3 2024 saw a year-on-year increase of 0.25 percentage points to 82.39% in gross margin. The increase in selling expenses ratio and business tax rate lowered the net profit margin attributable to the parent, with the overall calculation showing that the sales expense ratio/management expense ratio/business tax and surcharge ratio of the liquor sector in Q3 2024 increased by +0.17 / -0.01 / +0.23 percentage points year-on-year, driving the net profit margin attributable to the parent to decrease by 0.23 percentage points to 38.14% year-on-year.

Beer: Weak demand in Q3 2024, benefiting from cost advantages.

Demand is relatively weak, with slight pressure on the leading companies' volume and price, resulting in a slowdown in performance. In Q3 2024, the revenues of Tsingtao Brewery/Chongqing Brewery/Zhujiang Brewery decreased by 5.28% / 7.11% / 0.38% year-on-year, while Yanjing Brewery/Huiquan Brewery increased by 0.19% / 6.89% year-on-year. The product structure performance is weak, but the sales of high-end products in Tsingtao Brewery still show strong resilience. Cost advantages continue, with liquor companies actively improving quality and efficiency, maintaining a stable overall expense ratio, and slightly slowing down profit growth. Yanjing Brewery's reform efficiency led to a year-on-year increase in net profit attributable to the parent of 19.84%, surpassing its peers; while Tsingtao Brewery/Chongqing Brewery/Zhujiang Brewery/Huiquan Brewery saw net profit attributable to the parent decrease by -9.03% / -10.10% / +15.36% / +10.60% in Q3 2024.

Investment recommendations: Baijiu investment value highlighted, beer sector focused on undervalued leaders.

Baijiu: From the perspective of dividend yield, the investment value of the sector has increased. The preferred targets with cost-effectiveness and stable growth performance in 2025 are Wuliangye Yibin (000858.SZ), Kweichow Moutai (600519.SH), Shanxi Xinghuacun Fen Wine Factory (600809.SH), Anhui Gujing Distillery (000596.SZ), Anhui Yingjia Distillery (603198.SH); followed by Luzhou Laojiao (000568.SZ), Hebei Hengshui Laobaigan Liquor (600559.SH), Jiangsu King's Luck Brewery Joint-stock (603369.SH), etc.; recommended to pay attention to Jiangsu Yanghe Brewery Joint-stock (002304.SZ), Shede Spirits (600702.SH), Jiugui Liquor (000799.SZ), Anhui Golden Seed Winery (600199.SH).

Beer: Recommend undervalued leaders Tsingtao Brewery (600600.SH), China Resources Beer (00291), and Yanjing Brewery (000729.SZ) with expected reforms; suggest paying attention to Chongqing Brewery (600132.SH).

Risk Warning: Food safety risks, intensified competition risks, cost fluctuation risks.