Baijiu Rebounds as the Mid-Autumn and National Day Peak Season Begins and Moutai's Wholesale Prices Stabilise; E Fund (HK) CSI Liquor Index ETF (03189.HK) Beat the CSI Liquor Index by About 5 Points in All Three Periods
- The index's top ten constituents account for about 88.2%, led by KWEICHOW MOUTAI at 15.95%, SHANXI FEN WINE at 15.34%, LZLJ at 14.11% and WLY at 13.81% as of 31 August.
- The ETF listed in February 2023 with a total expense ratio of 1.4% and replicates the index through 80%-100% physical sampling via Stock Connect (up to 100% of net asset value) and QFI status, making no distributions.
- Baijiu sector valuations are at a decade low, leading distillers offer dividend yields of about 4%-7%, and August tobacco and liquor retail sales growth picked up from July.
On performance, the product fell 25.62% year to date, 17.75% over the past six months and 32.31% over the past year, while its tracking index (CSI Liquor Index) returned -30.90%, -22.47% and -38.54% over the same periods, leaving the ETF ahead of its benchmark by about 5.3, 4.7 and 6.2 percentage points respectively; the Hang Seng Index returned -4.32%, -1.72% and -7.89% and peer funds returned -0.50%, +2.60% and -2.38%, so the product, weighed down by the deep correction in the baijiu industry, still lagged both the Hong Kong market and its peers. Baijiu stocks rebounded strongly on 30 September: JINHUI rose 9.99%, GU JING 7.77%, YINGJIA GONGJIU 5.71%, LZLJ 5.06% and SHEDE SPIRITS 4.22%, while KWEICHOW MOUTAI gained 2.22% to RMB 1,263 and WLY rose 2.21% to RMB 70.29.
On the news front, the positives: with the Mid-Autumn and National Day peak season approaching, multiple Moutai self-operated stores have raised the price of Feitian Moutai to RMB 1,766 per bottle, the wholesale price of a full case is about RMB 1,750 and average terminal retail prices have recovered to RMB 1,798-1,830, while WLY's eighth-generation Puwu wholesale price has held above RMB 800. Channel feedback indicates that terminal inventories for baijiu brands have fallen to within two months, a relatively low level, and industry inventories are expected to destock further. Premium players remain resilient on earnings: WLY's first-half revenue reached RMB 28.417 billion, up 20.87%, with net profit attributable to shareholders of RMB 8.753 billion, up 89.30%; LZLJ's mid-to-high-end liquor gross margin was about 90.74% with an overall net margin of 41.8%; and KWEICHOW MOUTAI's first-half revenue reached RMB 90.703 billion, up 1.47%. On policy, the Ministry of Commerce and six other departments issued the "Implementation Opinions on Promoting the Expansion and Upgrading of Commodity Consumption", targeting total retail sales of consumer goods of about RMB 60 trillion by 2030; retail sales of tobacco and liquor reached RMB 396.6 billion in the first seven months, up 12.4% year on year, and August's tobacco and liquor retail sales growth picked up from July. Institutions note that sector valuations are at a decade low, fund holdings have fallen to the lowest since 2015 and leading distillers generally offer dividend yields of 4%-7%, providing a solid cushion. On the downside: the baijiu industry remains in a stock-adjustment cycle with growth at both ends and pressure in the middle, and the RMB 300-800 sub-premium segment is under clear pressure from consumption downgrading and weak business-banquet demand; August retail sales of consumer goods grew only 0.4% year on year, slower than July, with no clear improvement in real end demand and promotions used widely to drive volumes; the national baijiu wholesale price index fell about 2.6%-3.0% year on year in the first half and the industry expects a "volatile bottoming with weak recovery" in the second half; and the product is down more than 30% over the past year with a size of about RMB 70.75 million, thin secondary-market turnover and limited liquidity.
Managed by E Fund Asset Management (Hong Kong) Limited and listed in Hong Kong on 16 February 2023 with a total expense ratio of 1.4%, the product tracks the CSI Liquor Index (Net Return version): the index, compiled by China Securities Index Co., Ltd. and launched in January 2015, uses the CSI All Share Index as its universe, excludes the bottom 20% by liquidity, includes baijiu-related stocks in the theme and selects no more than 50 stocks ranked by average daily total market capitalization over the past year (currently 17), weighted by adjusted free-float market capitalization and rebalanced semi-annually. The product uses a physical representative sampling strategy, investing 80%-100% of net asset value in a representative portfolio highly correlated with the index mainly through Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect (up to 100% of net asset value) and/or the manager's QFI status (below 70%) in securities listed on the Shanghai and Shenzhen stock exchanges, with any constituent's weight deviation from the index capped at 3%; it currently makes no distributions to unitholders. As of 31 August, the index's top ten constituents accounted for about 88.2%: KWEICHOW MOUTAI 15.95%, SHANXI FEN WINE 15.34%, LZLJ 14.11%, WLY 13.81%, YANGHE 7.81%, KING'S LUCK 7.11%, GU JING 5.03%, YINGJIA GONGJIU 3.24%, JGJC 2.97% and LAO BAI GAN JIU 2.78%, an extremely high concentration: leading distillers' profitability and dividend capacity stand out, but the impact of industry cycles and policy changes on net asset value is also amplified. The product suits investors bullish on a valuation recovery and high dividend yields in the baijiu sector who can tolerate industry-cycle volatility and high concentration risk. Risk warning: for reference only; this is not investment advice; past performance does not guarantee future results; invest with caution. (Data source: ROYALFLUSH INFO iFinD, as of 30 September 2026)
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