CITIC SEC has released a research report expressing optimism about the recovery of the baijiu (Chinese liquor) sector. As the Spring Festival approaches, sales momentum is gradually picking up. Considering that the 2026 Spring Festival holiday will have one extra day compared to 2025, and given the relative resilience of consumption during major holidays like Spring Festival—where baijiu consumption is primarily driven by family reunions and gatherings—the additional holiday day is expected to increase consumption occasions. Overall, it is anticipated that baijiu sales performance during the 2026 Spring Festival peak season will be steady and slightly better than market expectations.
The baijiu industry has undergone several years of consecutive adjustments and is currently at the bottom of a long-term fundamental cycle. While a clear upward inflection point is not yet evident, the combination of being at a cyclical low, low market expectations, and low investor positioning means that any marginal improvement is expected to significantly boost sentiment toward the sector. CITIC SEC is optimistic about a recovery in the baijiu sector and recommends increasing allocations on price dips.
Additionally, with the Spring Festival and Lantern Festival approaching, some leading baijiu companies may experience short-term robust demand for restocking at the retail level. Key points from CITIC SEC's report are as follows:
Baijiu sales are gradually warming up as the Spring Festival nears, with performance expected to exceed market expectations. The Spring Festival holiday is a traditional peak season for baijiu consumption. This year, actual sales velocity began accelerating 3–4 weeks before the holiday, about 1–2 weeks earlier than in previous years, largely due to better-than-expected demand in the gifting market. Demand from social gatherings and mass consumption is expected to gradually release in the 1–2 weeks before the festival and during the holiday period. Taking into account the extra holiday day in 2026 and the inherent resilience of holiday consumption, baijiu sales during the peak season are projected to be steady and slightly above market expectations.
As of February 6, 2026, the price-to-earnings ratio (TTM) of the baijiu sector is approximately 19.5x, which is near the bottom of its medium- to long-term historical range—sitting at the 30th, 18th, 10th, and 16th percentiles over the past 3, 5, 10 years, and since listing, respectively. This valuation already reflects considerable medium- to long-term pessimism. Moreover, since 2024, leading baijiu companies have steadily improved shareholder returns, with major players generally maintaining dividend payout ratios above 65%, thereby enhancing investment safety margins.
Differentiation remains a key theme. In the premium segment, Moutai's Spring Festival sales have exceeded expectations. According to the WeChat public account "Today's Liquor Price," as of February 8 this year, the wholesale price of 53-degree 500ml Feitian Moutai has rebounded to around ¥1,660, an increase of approximately ¥100–150 per bottle compared to December 2025. It is estimated that the supply of standard Feitian Moutai during the Spring Festival period will see a slight year-on-year increase, with double-digit growth in shipments for January and February.
Performance in the mid-to-high-end price segment continues to diverge. Although demand for business banquets remains subdued, improved gifting demand and a gradual pickup in social drinking are expected to narrow the overall year-on-year decline in mid-to-high-end baijiu demand, with performance varying significantly by brand.
Regional baijiu producers face pressure from high base effects from the previous year, and are expected to experience some challenges during this year's Spring Festival and first quarter. While leading regional baijiu companies were less affected by policy changes in the first half of 2025 and achieved solid sales during the initial peak period, factors such as inventory pressure and incomplete recovery in gifting and business banquet demand have led many top regional players to lower their sales targets for the 2026 opening period. As a result, financial performance in the first quarter of this year is likely to be under pressure.
Risk factors include weaker-than-expected macroeconomic consumption demand, intensified competition within the baijiu and beer industries, underperformance of core baijiu product prices, channel inventory risks in the baijiu sector, slower-than-expected recovery in餐饮 consumption, and food safety issues.