Fangzheng Securities: Liquor as a high-quality pro-cyclical asset, valuation center still has room for repair.

Fangzheng Securities research report stated that the liquor sector has slowed down since Q2, impacted by the macro environment and weak end demand, causing short-term pressure on liquor companies' performance. The fundamentals are at a grinding bottom stage, with increasing differentiation among brands. In terms of price performance, high-end liquor > mid-range liquor > regional liquor companies. High-end liquor continues to maintain relative resilience through brand strength and channel control means. Leading brands such as Maotai have strengthened the high-end market base through actions such as controlling inventory and optimizing channels, demonstrating significant risk resistance. Looking ahead at the current situation, the bottom has been formed under the catalysis of multiple policies. The sector's PE-TTM ratio is 19.7X, with a five-year percentile of 14.3%, showing some signs of warming up but still at historically low levels. With overall economic expectations improving, liquor as a high-quality cyclical asset still has room for valuation recovery. In the future, attention will be focused on the improvement of end demand during the Mid-Autumn Festival and National Day, as well as the pace of policy improvement transmission to the demand side in the medium to long term.