CITIC CLSA: Baijiu Industry Facing a Decade-Long Cycle Bottom, Top 10 Consumption Predictions for 2026 Year of the Horse

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CITIC Construction Investment Securities Research

By Yang Ji, Ye Le, Liu Lewen, Ma Wangjie, Zhang Jiazhen, Gao Chang

Against the backdrop of expanding domestic demand being prioritized in the 2026 economic agenda, coupled with many core consumer assets potentially bottoming out and entering an upward cycle, and the emergence of new consumption patterns, we believe investment opportunities in the consumer sector should be emphasized. For example: the liquor industry, which may face a decade-long cycle bottom; companies capable of launching major products under health/functional/emotional value-driven consumption trends; retail/channel transformation beneficiaries; high-end consumption recovery; raw material import industries benefiting from RMB appreciation; and AI smart hardware-related stocks.

Forecast 1: Expanding domestic demand remains the top priority for 2026 economic work; CPI and social retail sales are expected to continue improving.

Forecast 2: The liquor industry is approaching a decade-long cycle bottom, with leading brands Maotai and Wuliangye already recovering first.

Forecast 3: Health, functional, and emotional value are core drivers for consumer product breakthroughs.

Forecast 4: Retail continues to show K-shaped differentiation; “efficiency revolution” and “experience upgrading” are the two main paths for transformation.

Forecast 5: Emotional value becomes a hard currency in consumer decision-making; experience economy and IP-driven consumption are shifting offline retail from a “transaction space” to an “emotional space.”

Forecast 6: A surge of new store openings in township chain formats nationwide; more brands are moving into county and township markets, entering a new stage of supply revolution.

Forecast 7: Under wealth effects, high-end consumption is expected to continue strengthening in 2026.

Forecast 8: Ongoing inflow of potential unmet foreign exchange demand; RMB appreciation favors raw material import industries.

Forecast 9: Explosive growth in new categories of AI smart hardware, with smart ecosystems centered around home environments emerging.

Investment Advice Forecast 10: Cyclical bottom consumer core assets should be prioritized; focus on high-certainty domestic demand assets.

Food Safety Risks: Food safety incidents could significantly impact brand image and, consequently, the performance of related stocks.

Raw Material Price Increases: Sustained high prices of certain raw materials and packaging materials could pressure costs across various stocks in the mass-market segment, affecting profit margins and profitability.

Weak Terminal Demand: Declining consumer confidence and purchasing power may lead to sales shortfalls, resulting in demand weakness and directly impacting corporate operations.

Industry Data Risks: Subjective classification and filtering may lead to discrepancies between actual conditions and data conclusions.

Yang Ji: Head of the Consumer Sector at CITIC Construction Investment Securities and Chief Analyst of Food & Beverage Industry. With 13 years of industry experience and 6 years in securities, he has served as a partner at consulting firms and as Deputy Secretary-General of the China Alcohol Circulation Association Expert Committee. He has led teams serving nearly 80% of listed liquor companies and many consumer brands, with deep professional insight, industry-leading perspectives, and extensive industry accumulation. In 2024, he led his team to win 9 Best Analyst awards; from 2022 to 2024, he was consecutively recognized in the New Fortune Top Analysts; ranked first in Wind’s Gold Medal Analysts in 2023 and second in 2024; awarded Sina’s Golden Kirin Best Analyst and Future Star awards in 2022, 2023, and 2024; and received the Golden Bull Award (2024), 21st Century Gold Analyst (2024), and other honors.

Liu Lewen: Chief Analyst of Social Services and Commerce Industry. Graduated from Xi’an Jiaotong University with a bachelor’s degree and from Johns Hopkins University in the US with a master’s degree. Has years of research experience in commerce and social service industries, with in-depth insights into beauty, jewelry, fashion, catering, retail, and trade sectors. Awarded Crystal Ball Best Analyst in Social Services, New Fortune Best Overseas Research, Sina Best Analyst, among others.

Ye Le: Chief Analyst of Textiles, Light Industry, and Education Sectors. Holds a master’s degree in finance from Fudan University. Winner of the 2025 and 2024 Golden Bull Award for Best Analyst in Textiles & Apparel; 2025 Golden Kirin for Light Industry and Textiles & Apparel; part of the 2020 New Fortune Overseas Best Analyst Top 5 team. Currently focuses on research in textiles, light industry, gold jewelry, education, medical aesthetics, and IP trend toys.

Ma Wangjie: Chief Analyst of Home Appliances and Agriculture at CITIC Construction Investment Securities. Holds a master’s degree in management from Shanghai Jiao Tong University. Known for solid research and clear viewpoints. Focuses on white goods, black goods, small appliances, cleaning appliances, two-wheelers, motorcycles, and electric gardening tools. Recognized as a finalist for New Fortune Best Analyst, Shanghai Securities Journal Best Analyst, Wind Gold Medal Analyst, and Sina Golden Kirin Best Analyst.

Zhang Jiazhen: Food & Beverage Industry Analyst. Holds a master’s degree in economics from Nanjing University. Has five years of experience in securities research. Joined CITIC Construction Investment Securities’ Food & Beverage team in 2026, mainly responsible for alcohol and large consumer sectors. Recognized as a core member of the New Fortune Top Analyst team for three consecutive years (2022–2024).

Gao Chang: Food & Beverage Analyst at CITIC Construction Investment. Holds a master’s degree from Central University of Finance and Economics. Focuses on beer, beverages, snacks, dairy, and health supplements.

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Editor: Ling Chen