CPI beat expectations, the liquor sector’s inflection point nears, and E Fund (HK) CSI Liquor Index ETF (03189.HK) surged more than 1 % in early trading.

In December, domestic-demand and consumption-boosting policies continued to take effect. Coupled with the approaching New Year holiday, household consumption demand picked up, pushing the Consumer Price Index (CPI) up 0.2 % month-on-month and 0.8 % year-on-year. Buoyed by the positive data, E Fund (HK) CSI Liquor Index ETF (03189.HK) surged more than 1 %.

According to HKEX data, the fund is Hong Kong’s first exchange-traded product dedicated to mainland China’s baijiu (white-spirit) sector. It closely tracks the CSI Baijiu Index, which—using the CSI All Share Index as its universe—selects listed companies engaged in baijiu production, offering investors a diversified basket. Its top ten holdings include leading producers such as Kweichow Moutai, Wuliangye and Luzhou Laojiao.

Corporate newsflow: In December 2025 Moutai, Wuliangye, Gujing Gongjiu and Xijiu successively held national distributor conferences, unveiling full-year results and 2026 strategic plans. The meetings sent a clear signal of “steady operations against headwinds and active breakout moves,” while spelling out forthcoming changes to marketing policies for 2026.

CITIC Securities notes that China’s baijiu industry is shifting from a “stock” to a “shrinking-volume” phase. Leading distillers are eking out earnings growth through ultra-tight supply management, but retail prices remain under pressure from weak sell-through. Since 2022, macro indicators—retail sales, CPI, PPI and real-estate investment—have steadily weakened. As the economy swaps old drivers for new, baijiu demand has entered a stock phase. The 2025 new “anti-banquet-drinking” decree added further drag. From 2022-2024, top brands expanded channels and built inventories to keep revenue growing, but in 2025 earnings growth was revised down across the board. Throughout this period, high-end ex-factory prices failed to keep rising, and attempted price hikes barely filtered through to consumers.

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