Shen Wan Hongyuan: 26Q3 liquor revenue and profits are still under pressure, and the industry has been growing steadily for 27 years

The Zhitong Finance App learned that Shen Wan Hongyuan released a research report saying that the 26Q3 liquor sector's revenue and profits are still under pressure, fundamental pressure is being released at an accelerated pace, and reporting pressure is being cleared at an accelerated pace. The bank believes that the bottom characteristics of the sector have been verified. 1. The time and extent of sector adjustments have been sufficient; 2. Stock prices have basically reflected the market's pessimistic expectations; 3. The attractiveness of high-quality individual stock valuations has increased markedly, dividend ratios have reached a high level, and leading companies have the ability to maintain steady growth in revenue and profit. According to the report side, most companies continued to release pressure in '26, but the pace and magnitude of the adjustments were not the same. Therefore, the inflection point and flexibility of each company's performance reversal was also different. The bank expects most leading companies to clear their statements in '26, the pressure will be released, and it is expected to return to the growth cycle in '27. Looking ahead to 27 years, as the industry stabilizes, different companies have different alphas in the process of stabilizing and improving, so there will also be significant differences in the performance flexibility and valuation flexibility shown.

Shen Wan Hongyuan's main views are as follows:

Fundamental analysis: 26Q3 revenue and profit declined year-on-year, leading companies ushered in a reversal in performance

The revenue and profits of the 1. 26Q3 liquor sector continued to be under pressure. Sub-high-end profits began to recover, and revenue from some real estate products gradually improved. 26Q3 revenue was 67.92 billion yuan, down 9.76% year on year, and net profit to mother was 24.59 billion yuan, down 12.32% year on year. The revenue growth rate was nationalized famous wine > sub-high-end > real estate wine, and the net profit growth rate of Guimu was sub-high-end > national famous wine > real estate wine.

2. Profit differentiation in the 26Q3 liquor sector, the net interest rate of the sub-high-end sector increased, and the net interest rate of real estate liquor declined significantly. The net profit margin of the liquor sector in the first three quarters of 2026 was 38.7%, down 0.8 percentage points from the previous year, mainly affected by the decline in gross margin and the increase in sales expenses. 26Q3 net profit margin was 37.3%, down 1.0 percentage point year on year; gross margin increased 0.3 percentage points, but sales expenses increased 1.6 percentage points, and net interest rate was still under pressure.

3. Advance accounts from the liquor sector at the end of 26Q3 were 55.86 billion yuan, a decrease of 3.81 billion yuan compared to the end of 26Q2, and an increase of 2.15 billion yuan over the same period last year. Due to channel changes, advance payments for famous national liquors declined month-on-month, and sub-high-end and real estate wines increased month-on-month. The month-on-month changes in the latter two improved compared to the same period last year.

4. The net operating cash flow of the 26Q3 liquor sector was 27.86 billion yuan, up 30.2% year on year. Cash received from sales of goods and services was 76.81 billion yuan, down 6.2% year on year. The decline was less than the decline in revenue.

Valuation analysis

Judging from the valuation performance, the current sector's valuation is still below the historical center. As of October 30, 2026, the absolute PE level of the liquor sector was 21.5x, lower than the historical daily average of 27.1x since 2011. The relative PE ratio of the liquor sector (compared to the Shanghai Composite Index) is 1.41x, lower than the historical daily average of 1.96x since 2011. National wine companies, such as Kweichow Moutai, etc., are basically 15-20 times their valuations in '27. The bank believes that in '26, the industry bottomed out in the downward process. Starting in 26Q3, the fundamentals of some companies have begun to reverse and return to the growth cycle. In '26, the fundamentals of most companies will bottom out, and report side performance is at the bottom of the downward cycle. The industry is expected to stabilize in '27, leading wine companies are expected to return to the growth cycle, and leading companies are expected to experience a double hit in valuation and performance.

Risk warning: The economic downturn affects overall demand for liquor; food safety issues.