The baijiu industry has undergone significant cyclical changes over the past few decades. The first cycle occurred between 1998 and 2002, during which the entire industry fell into a slump due to the Asian financial crisis and counterfeit liquor incidents. During this period, leading enterprises represented by Moutai began to make strategic adjustments, establishing their own distribution networks and promoting the concept of "vintage liquor," while steadily increasing ex-factory prices.

The second cycle occurred from 2012 to 2016, mainly due to the implementation of government restrictions on "three public consumption" policies. In the face of this challenge, companies like Moutai turned to expanding the business wine market, relaxing distribution thresholds to increase market coverage, and strengthening the construction of group purchasing and direct sales channels. It is worth noting that during this period, Moutai insisted on not lowering the factory price while striving to maintain retail price levels.

According to historical patterns, each cycle lasts approximately 4 years. Based on this calculation, the period from 2021 to 2025 could be the third cycle. Industry insiders expect that the performance of most liquor companies may bottom out between 2024 and 2025 and begin to stabilize. With the implementation of various economic stimulus policies, the economy is gradually recovering, and the demand for liquor consumption is expected to gradually warm up.

From historical experience, every industry crisis has provided investors with a good opportunity to invest in quality companies. Although challenges may arise in the short term, in the long run, liquor companies with strong brand power and innovation capabilities are expected to stand out during market recovery, bringing substantial returns to investors.

In this challenging and opportunity-filled period, investors should closely monitor industry trends and corporate strategic adjustments, especially those leading companies that have demonstrated strong adaptability and innovation capabilities in past cycles. At the same time, it is essential to be vigilant about potential policy changes and shifts in consumer trends, ensuring a comprehensive risk assessment.