China Baijiu Needs a bit more time

Research evidence excerpt

China Baijiu Needs a bit more time

3 July 2026

Equity Research Report

China Baijiu EquitiesBeverages

Needs a bit more time China

◆ Muted sell-through during the Dragon Boat Festival; 2Q Kathy Song* (Reg. No. S1700517120001)

earnings not exciting due to continuous destocking Head of A-share Consumer Research HSBC Qianhai Securities Limited

kathy.l.h.song@hsbcqh.com.cn

◆ Lacking catalysts in the near term, with positions and +86 21 5066 2007

valuations trending even lower Doris Luo* (Reg. No. S1700524120003)

Analyst, A-share Consumer Research

HSBC Qianhai Securities Limited

◆ Await high season of Mid-Autumn and National Day holiday: doris.y.s.luo@hsbcqh.com.cn

prefer Moutai (Buy); downgrade Fen Wine to Hold (from Buy) +86 755 8898 3161

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

Muted performance during Dragon Boat Festival. The baijiu sell-through in April-May not registered/ qualified pursuant to FINRA regulations

remained under pressure, given 2Q is normally a low season, as well as the relatively

high comps in 2025. Going into June, with the y-o-y comps easing and aided by the

Dragon Boat Festival, we estimate that some areas, such as Jiangsu and Sichuan, saw

moderate y-o-y growth in sell-through; however, a double-digit decline is expected

nationwide versus the same period in 2024. That said, the industry is still at the bottom.

By consumption scenario, we believe mass banquets continued to show a stable

performance, while government and business-related scenarios have yet to recover.

Since 2Q, the Wind baijiu index is down 20% (CSI 300 up 12% over the same period).

Lacking catalysts in the near term; waiting for 2Q to release earnings pressure.

We believe most of the baijiu companies are still focusing on destocking in 2Q and