Are foreign investors about to buy the dip? The liquor sector is welcoming institutional research, with UBS, Temasek, and IDG all paying attention to this leading company.

Ask AI · QFII intensively surveys the liquor sector, does this indicate foreign capital re-pricing Chinese consumer assets?

Every Day Economic News Reporter: Yang Jian Edited by: Zhao Yun

Since the beginning of this year, the A-share liquor sector has been at a critical stage of the cycle bottom, weak recovery, and strong differentiation.

Just in late March, the liquor sector experienced intensive institutional research, with Wuliangye attracting key attention from three QFII institutions including UBS Asset Management, Temasek, and IDG. What signals does this reveal?

In response, a private equity professional said that foreign investors’ aesthetic for China’s core assets has never changed; they are currently just waiting for a valuation and cycle double-click window. The intensive research by QFII is a clear signal of foreign capital re-focusing on and possibly deploying in the liquor sector.

Research Focus 1: Low-alcohol Liquor
Addressing Young Consumer Disconnection
Mild taste may become key

Currently, young consumer groups pursue a drinking experience of “mild intoxication rather than drunkenness,” and low-alcohol, palatable, and scene-based products have become an irreversible development trend in the liquor industry.

Data from the China Alcoholic Drinks Association shows that from 2020 to 2024, the market size of low-alcohol liquor jumped from 20 billion yuan to 57 billion yuan, with a compound annual growth rate of 25%, far exceeding the overall industry growth. As a leading enterprise that has early laid out and deeply cultivated the low-alcohol field, Luzhou Laojiao received concentrated research from eight institutions including Orient Securities, CITIC Securities, and CICC on March 26, with low-alcohol liquor becoming a core focus of institutional attention.

Currently, the company’s 38-degree Guojiao 1573 has become the industry’s first low-alcohol product with a billion-yuan sales volume. Luzhou Laojiao stated during research that more and more young consumers prefer to drink low-alcohol liquor, and low-alcoholization has become one of the core development trends of Chinese white spirits. The recognition of low-alcohol products continues to rise in key regions such as North China, East China, and Southwest China, as well as in more emerging markets, fully demonstrating consumer approval. In the future, the company will steadily promote nationwide deployment of low-alcohol products and continue to lead the low-alcohol track.

Last August, Wuliangye launched the 29° Wuliangye · Yijian Qingxin, which is an important layout in Wuliangye’s youth strategy. According to relevant data, this product surpassed 100 million yuan in sales within four months of launch on JD.com, becoming a core platform for breaking into new circles and reaching young and female consumers. Meanwhile, the company is innovating channels to adapt to the trend of low-alcohol consumption, creating innovative terminal formats such as Wuliang · Zizao New Trend Experience Stores and West Lake Trendy Drink Stores, breaking the stereotypical impression of traditional white spirits channels, and building vertical channel touchpoints aimed at young and female consumers, achieving a channel closed loop of “terminal traffic - consumption cultivation - circle layer sedimentation.”

Regarding this, Chen Xingwen of Heizi Capital told the reporter of “Daily Economic News · Jiang Jin Jiu” (hereinafter referred to as the reporter) that the industry opportunities under the differentiation pattern are more pure, and the new generation’s taste revolution is reshaping the underlying logic of the white spirit industry. The industry shifting from “general rise β” to “leader α” is actually a healthy return of investment logic. The real long-term variable lies in the changing drinking habits of Generation Z and Millennials—they pursue “mild intoxication rather than drunkenness,” favoring low-alcohol, palatable, scene-based drinking experiences, similar to the path of high-end sake after Japan’s bubble economy and the explosion of the American whiskey collection market.

“Our attitude towards the white spirit sector is ‘positive deployment, but stay sober,’” Chen said. “This is not a game chasing short-term rebounds, but a strategic allocation of ‘core Chinese consumption assets’ from a ten-year cycle perspective, based on full pricing of the ‘taste revolution.’ The current weak recovery environment provides us with a window for calm accumulation, waiting for valuation repair and generational dividend double-click.”

Chen further said that domestic leading white spirits companies have keenly captured this trend, but real industry actions include accelerating R&D of low-alcohol spirits, expanding product matrices with small bottles and ready-to-drink scenes, and shifting narratives from “toast culture” to “tasting culture.” Although the white spirit sector has a clean chip structure and ample expectations, the disconnection of young consumers from traditional high-proof spirits is a real challenge. This requires investors to look not only at current valuation repair but also at whether companies have strategic execution power for “younger taste”—who can break the stereotype of “spicy and pungent,” using mellow, fruity, low-alcohol product language to communicate with the new generation of consumers, will win the incremental market in the next decade.

Research Focus 2: Digital Marketing
E-commerce + Instant Retail as New Breakthroughs
Liquor companies accelerate channel refinement

Under the trend of diversified consumption scenarios and online consumption habits, e-commerce channels and instant retail tracks have become core focal points for liquor companies to break growth bottlenecks and reach end consumers. Therefore, digital marketing has also become another key focus of institutional research.

On March 24, Wuliangye stated during 27 institutional visits that the company is deeply expanding incremental channel scenarios, building a sports marketing channel matrix covering Wuliangye, strong aroma spirits, and Xianlin spirits, entering JD Sports event zones and other vertical traffic entrances to precisely reach young sports consumers; simultaneously, deepening group buying channels, continuously promoting the “famous liquor into famous enterprises” special project, expanding high-net-worth corporate client channels, and improving B-to-C channel conversion efficiency.

In terms of e-commerce layout, Wuliangye is focusing on quality improvement and actively deploying the new instant retail track. The company established a dedicated e-commerce operation team to enhance online channel operation efficiency; fully entered JD Flash Delivery, Meituan Flash Purchase, and other instant delivery platforms, building a “online order, instant delivery” short-chain channel system, covering all instant consumption scenarios, further compressing channel layers, and achieving zero-distance contact with end consumers.

As a regional specialty liquor representative, Jinhui Liquor received 60 institutional visits on March 21, with research focusing on product structure upgrades and marketing model innovation. The company said it will continue optimizing product structure, focusing on products above 100 yuan, led by Jinhui 28 and Jinhui 18 vintage series, effectively driving sales of the entire product line. Meanwhile, through business model optimization, targeted resource allocation, and deep consumer cultivation, the company promotes marketing transformation centered on “brand-led user projects + market deep control = small ecosystem driving large ecosystem.” In the future, Jinhui Liquor will actively innovate marketing methods, promote shared model innovation, and build a sustainable joint venture of factory, merchant, and user collaboration, striving for high-quality development.

Yibin Shede Liquor, which was visited by 35 institutions in one day, also clarified its online channel development plan. The company said it will continue increasing distribution channels online, allowing a broader audience to access and purchase Shede and Tuo Pai series spirits through various internet platforms; build an internet marketing product matrix, launching more popular online star products; and strengthen talent team building, advancing refined private domain membership operations.

QFII intensive research signals clear
Valuation and cycle double-click window approaching
Foreign capital may heavily invest in core liquor assets

The intensive research by QFII institutions may reflect a re-evaluation and deployment of China’s core liquor assets by foreign investors. On March 24, among the 27 institutions that visited Wuliangye, besides insurance firms like Ping An Annuity and China Life, there were also well-known QFII foreign institutions such as UBS Asset Management, Temasek, and IDG.

Chen Xingwen of Heizi Capital told the reporter that the current white spirits industry is indeed at the tail end of the inventory cycle. Channel inventories have been compressed from a peak of 4-5 months three years ago to a healthy level of 2-3 months, and the stabilization and rebound of wholesale prices are positive signals of supply-demand rebalancing.

Especially with the recent price increase of Feitian Maotai, which not only raises the price ceiling but also reshapes industry confidence—when leading brands dare to raise prices in a weak recovery environment, it indicates strong confidence in terminal sales far beyond market expectations. From an international perspective, global spirits giants Diageo and Pernod Ricard also rely on price increases to maintain profit growth during periods of slowing economic growth in Europe and America. Maotai’s move precisely confirms that China’s high-end white spirits’ pricing logic is aligning with international luxury goods.

Behind the surge in institutional research is a structural shift in capital allocation, with QFII’s entry especially noteworthy—foreign capital’s aesthetic for China’s core assets has never changed; they are just waiting for the valuation and cycle double-click window. Currently, the PE-TTM of the white spirits sector is at the 30th percentile over the past decade, while ROE remains above 25%, making this “high profitability + low valuation” combination highly scarce in global asset allocation.

“We see net inflows from northbound funds into food and beverages accelerating significantly over the past three months. This is not a short-term game but a re-pricing of China’s consumption resilience by long-term capital.”

Pachaiwang Wealth Researcher Zhang Pengyuan told the reporter that the intensive research by QFII is a clear signal of foreign capital re-focusing and possibly deploying in the white spirits sector. The core logic is that the sector is at the cycle bottom, inventory is clearing, and prices are stabilizing, with valuations at a historic low, providing high-cost-performance “bottom chips” for risk-averse foreign investors. Meanwhile, leading white spirits companies are reshaping growth logic through channel reforms, demonstrating strong operational resilience. Furthermore, in the weak recovery and strong differentiation pattern, the research and potential increased allocation by foreign capital reflect renewed recognition of the long-term value of China’s core assets with high certainty.

Zhang further analyzed that Maotai’s price hike has multiple positive impacts on the entire sector: on one hand, it breaks rigid pricing guidance, indicating that high-end white spirits are entering a more market-oriented “follow the market” stage, helping to restore channel profits and stabilize the overall price system; on the other hand, it is a strong display of pricing power by the leader, releasing positive signals during the industry’s low ebb, significantly boosting sector confidence, and injecting strong momentum to lead the industry out of adjustment. Currently, the valuation of the white spirits sector is at a historic low, and Maotai’s price increase further opens up space for valuation recovery of high-end spirits. Under the industry’s differentiation pattern, the allocation value of leading core assets is increasingly prominent.

Daily Economic News