According to a research report, the baijiu sector's first half of 2025 performance showed signs of pressure relief as the industry accelerates its bottoming process. The 17 major listed baijiu companies recorded total revenue and net profit attributable to shareholders of 236.83 billion yuan and 94.46 billion yuan respectively, representing year-on-year declines of 0.4% and 0.9%. For Q2 alone, these companies achieved revenue and net profit of 86.72 billion yuan and 31.34 billion yuan respectively, down 4.7% and 7.3% year-on-year, marking the first negative revenue growth in this cycle, with profit decline exceeding revenue decline.

Q2 policy headwinds led to accelerated pressure transmission from channels to financial statements, with interim reports showing accelerated clearing becoming an industry consensus. Since August, with scenario recovery and concentrated demand release from graduation banquets, channels have reported positive signals such as sequential recovery in bottle-opening sales driven by banquet demand. The Mid-Autumn Festival and National Day peak season will accelerate the fundamental bottoming process, with financial statement recovery expected to begin in 2026.

**From "Passive Clearing" to "Active Adjustment" - Industry in Accelerated Bottoming Phase**

Industry characteristics determine that most brands, facing "continuous damage to actual demand scenarios," prioritize leveraging their brand and channel resilience to meet "predetermined performance growth targets." The prolonged "oversupply" situation has led to continuous pressure accumulation in channel inventory, pricing, and cash flow, triggering sustained market concerns and pricing anchor deviation. The H1 2025 financial report deceleration adjustment helps correct these imbalances.

During the volume contraction adjustment period, structural opportunities emerge as the market's long-term pricing increasingly favors "dividend yield" and "market share," including price segment leaders, market share, and brand positioning. Short-term expectations have largely aligned regarding the timing of fundamental adjustment rhythm and pressure transmission from brand inventory performance. The market focus has shifted from "marginal changes in scenario recovery and sales momentum" to attention on year-on-year trends to verify demand bottoms.

**Expectations**: Trend-wise, the recovery and sequential improvement during peak-season transitions is certain. The resilience of "deep scenario" demand such as banquets and family gatherings is rooted in culture. The institutional emphasis of prohibitions and traditional festival discipline is normalized, while the recovery elasticity of government-business scenarios can reference macroeconomic indicators as leading indicators.

Q3 financial statements may still show strong differentiation, with apparent growth decline narrowing gradually after Spring Festival, entering a "weak recovery" phase. The 2025 baijiu recovery stage resembles that of 2014, though the industry faces potentially greater environmental challenges while individual brands may not necessarily face the same degree of difficulty.

**"Trading Price for Volume" - Intensified Competition and Consumer Promotion Driving Price Declines**

Peak season liquidity abundance under high inventory and stable growth pressure will inevitably manifest as price declines. E-commerce platforms and instant retail platforms like delivery services will also boost price reductions through subsidies, accompanied by inventory reduction (as terminal stores pursue cash flow and inventory turnover, channel transfers are relatively convenient, current stocking is relatively low, with inventory mainly accumulated at distributors; peak season consumption impulse transmission may help offset downward price pressure).

**Deep Scenario Support - Sector Enters Multiple Bottom Allocation Range**

In H1 2025, the baijiu industry experienced slow macroeconomic recovery, high inventory cycle depletion, and policy suppression from the strictest alcohol prohibition order on May 18. Consumption scenarios were damaged, industry demand continued under pressure, and alcohol companies slowed collection pace to relieve channel pressure and accelerate inventory reduction. Q2 reports turned negative year-on-year, with the industry accelerating clearing and bottoming.

The industry currently sits at multiple bottoms in valuation, institutional positioning, and fundamentals. Q2 policy headwinds led to accelerated pressure transmission from channels to financial statements, with interim reports showing accelerated clearing as industry consensus. Slowing growth, structural decline, reservoir contraction, and declining cash collection ratios became common themes in alcohol companies' interim reports.

**Industry Financial Performance Analysis**

For H1 2025, the 17 major baijiu listed companies achieved revenue and net profit of 236.83 billion yuan and 94.46 billion yuan respectively, down 0.4% and 0.9% year-on-year. Q2 alone saw revenue and net profit of 86.72 billion yuan and 31.34 billion yuan, down 4.7% and 7.3% year-on-year.

Excluding Kweichow Moutai, H1 2025 revenue and net profit reached 145.74 billion yuan and 49.06 billion yuan respectively, down 5.5% and 8.6% year-on-year. Q2 alone achieved revenue and net profit of 47.07 billion yuan and 12.78 billion yuan, down 12.9% and 20.9% year-on-year, with both revenue and profit accelerating sequential declines.

Companies relaxed collection policies to relieve channel pressure, with profitability affected by product mix and trade discounts, while scale effects diminished amid rigid expense spending. H1 collection progress generally lagged behind the same period, with contract liabilities declining 2.5% year-on-year and sales cash collection down 3.2% year-on-year.

H1 2025 baijiu sector gross margin and net profit margin reached 82.5% and 39.9% respectively, up 0.10 and down 0.23 percentage points year-on-year. Excluding Moutai, figures were 76.9% and 33.7%, down 0.36 and 1.13 percentage points respectively.

**Volume and Price Dynamics**

Alcohol prohibition policies suppressed government-business scenario high-end baijiu demand. H1 2025 reports generally showed volume growth with price declines. Q2 major brands entered the banquet market, strengthening sales momentum through lowered policy thresholds and increased policy intensity, leading to increased trade discounts, lower per-unit prices, and declining gross margins.

The sector has entered bottom allocation range, with attention on marginal catalysts from peak season consumption impulse events. Since August, scenario recovery and concentrated graduation banquet demand release have generated positive channel feedback signals of sequential recovery in bottle-opening sales driven by banquet demand. The Mid-Autumn and National Day peak season will accelerate fundamental bottoming, with financial statement recovery expected to begin in 2026.

**Investment Recommendations**

Recommend strong brand companies including Kweichow Moutai (600519.SH), Wuliangye (000858.SZ), and Jiannanchun (000568.SZ); companies with clear growth paths in counter-cyclical conditions like Shanxi Fenjiu (600809.SH); regional leaders with strong growth potential in both regional and price segments including Jiugui Liquor (000596.SZ), Jinhui Liquor (603919.SH), Yingjia Gongjiu (603198.SH), Jinshiyuan (603369.SH), and Laobaigan (600559.SH); ZJLD (06979) exploring incremental opportunities through "premium model"; attention to companies with clear clearing paths and new product reserves including Yanghe (002304.SZ) and Jiugui Liquor (000799.SZ); and Shede Spirits (600702.SH) with effective channel inventory reduction and 2024 tax impact normalization.

**Risk Warnings**

Consumer scenario recovery pace and related stimulus policy effectiveness falling short of expectations; industrial policy adjustment risks; food safety risks.