As an important part of China's consumer goods market, the liquor industry has experienced great fluctuations recently. Today's sharp increase in the liquor sector is mainly due to the market's pessimistic expectations for current and future demand. However, even in the face of stress and uncertainty, we need to focus on the resilience of outstanding companies and structural growth opportunities in the medium to long term.
Taking Shanxi Fenjiu as an example, the company conveyed its own development confidence and pragmatic development goals at last week's dealer meeting. On the one hand, distributors have enjoyed the dividends of Fenjiu's rapid growth in the past few years and are still profitable, so they are more motivated. On the other hand, the company's management is very pragmatic and takes a long-term view to ensure high-quality growth. In the medium and long term, the fragrance category has outstanding advantages, the market growth space is still very large, and Fenjiu still has a lot of room for development in the future.
In addition, Luzhou Laojiao adopts a more flexible and pragmatic payment method in channel feedback, which reflects the company's rapid response speed and positive response ability to market changes. By competing for market share to achieve the task of collecting money during the Spring Festival, Laojiao is still one of the enterprises with the best management level and execution.
In the short term, the prosperity of the liquor industry is currently in the stage of grinding the bottom. Although it is still the off-season and lacks catalysts, we should not be too pessimistic. At present, the valuation of the liquor industry has dropped significantly, and even if you look at the valuation of TTM, it is no longer expensive. In the medium term, we believe that under the dual effects of stable growth policies and endogenous economic repair, consumer demand is expected to stabilize and rebound. Therefore, at this stage, we are relatively optimistic about high-end wines and strong regional leading enterprises, and in the medium term, we are more concerned about the bottom varieties with long-term competitiveness and sufficient adjustment.
Overall, although the liquor industry is facing short-term pressure and uncertainty, excellent companies still have the ability to cope and medium- to long-term growth opportunities. When choosing investment targets, we need to pay attention to various factors such as the competitiveness of the company, market prospects and valuation levels to achieve long-term stable investment returns.
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