Zhongtong Finance App learned that Huatai Securities released a research report stating that the overall demand for the industry in 2024 is expected to recover steadily. It is bullish on the long-term potential of consumer demand for food and drink, and has high configuration value considering the valuation level. Looking forward to 2024, it is recommended to actively pay attention to the industry trend of 'price-to-quality ratio', seize the opportunity of sector differentiation, and focus on white wine/beer/soft drinks/snacks under the trend of 'price-to-quality ratio'.

Here are the main points of HuaTai Securities:

Looking forward to 2024, under the trend of 'price-to-quality ratio', the sector differentiation interpretation.

Under the dual effects of macro (under the new economic normal, companies that can adapt to market demand and continue to launch products that meet consumer needs have the opportunity to maintain continuous growth) and micro (consumer trends tend to be pragmatic and self-enjoying, 'price-to-quality ratio' has become one of the core driving factors for consumer decision-making), the domestic consumer market is gradually ushering in a new era of 'price-to-quality ratio' consumption. At present, if companies want to successfully 'go through the cycle', they must have both external trends and internal management. The bank believes that the overall demand for the industry in 2024 is expected to recover steadily. It is bullish on the long-term potential of consumer demand for food and drink, and has high configuration value considering the valuation level. Looking forward to 2024, it is recommended to actively pay attention to the industry trend of 'price-to-quality ratio', seize the opportunity of sector differentiation.

Going with the trend: 'price-to-quality ratio' consumption has a solid foundation.

Macroscopically, the development of the domestic economy has entered a 'new normal', and the consumer market is gradually transitioning to a stock market. Economic growth relies more on existing market efficiency and value enhancement. Although consumer purchasing power has not shown a significant decline, their consumption decisions will pay more attention to the actual value and quality of the products. Microscopically, consumers' consumption concepts tend to be pragmatic and self-enjoying, and rational consumption is gradually becoming the mainstream of the Chinese consumer market. Overall, 'consumer grading' has become the main characteristic of the current consumption market, and 'price-to-quality ratio' (the product quality that can be purchased per unit price) has become a new standard for consumer purchasing decisions. As the era of 'price-to-quality ratio' has fully arrived, market competition is shifting from 'grabbing land' to more complex 'going through the cycle'.

Improving efficiency: Intensifying demands for efficiency enhancement and gradually easing cost pressures.

The pursuit of 'high price-to-quality ratio' products by demand-side consumers has prompted supply-side manufacturers to provide products that are more competitive in terms of product competitiveness and price attractiveness. Further catalyze its upward tracing, internal refinement, and pursuit of cost rate optimization and cost-side improvement. On the one hand, with the development and improvement of the supply chain, there has been a more obvious phenomenon of high-efficiency channels squeezing or replacing low-efficiency channels in the industry. The high-efficiency transformation downstream also puts higher demands on enterprise supply chain management efficiency, and the leading enterprises continue to optimize their raw material procurement efficiency, production and processing efficiency, and cost allocation efficiency to enhance their internal strength. On the other hand, the improving cost trend of some sub-sectors since 2023 is still continuing in 2024. The sub-sectors of cured products/nuts and kernels/yeast have benefited from the significant alleviation of cost pressures due to the decline in raw material prices and the alleviation of cost pressures in the sub-sectors of beer/condiments.

Sector differentiation: Focus on white wine/beer/soft drinks/snacks under the trend of 'price-to-quality ratio'.

1) White wine: 'Both ends' perform better than the 'middle', on the one hand, high-end wine benefits from the demand for gifts and has strong brand strength. It has configuration value at a relatively high dividend rate. On the other hand, the trend of rational consumption is rising, and 'price-to-quality ratio' has become the main consideration factor for consumer decision-making. It is bullish on the future of liquor and grain racing. In addition, regional leaders with continuously increasing operating momentum will also continue to benefit from the market dividend of their home market and achieve resilient growth. 2) Beer: Under the trend of 'price-to-quality ratio', the upgrade of beer consumption still has resilience. The 8 yuan product cuts high-quality and mid-priced attributes and is expected to lead the industry upgrade. 3) Soft drinks: Due to the low value, dopamine consumption attributes, and strong travel demand to promote the increase in thirst-quenching demand, the sector is expected to fully benefit and achieve sustained growth. 4) Snacks: In the era of channel transformation 2.0, the core of high efficiency remains unchanged, and the expansion space is still sufficient.

2) Beer: Under the trend of 'price-to-quality ratio', the upgrade of beer consumption still has resilience. The 8 yuan product cuts high-quality and mid-priced attributes and is expected to lead the industry upgrade.

3) Soft drinks: Due to the low value, dopamine consumption attributes, and strong travel demand to promote the increase in thirst-quenching demand, the sector is expected to fully benefit and achieve sustained growth.

4) Snacks: In the era of channel transformation 2.0, the core of high efficiency remains unchanged, and the expansion space is still sufficient.

Risk warning: market demand falls below expectations, market competition is more intense than expected, food safety risks.