Zhijun Finance APP learned that CICC released a research report stating that it is bullish on three investment themes in the second half of the year, including leading companies in high-growth tracks, high dividend stocks, and individual stocks with abundant cash reserves and potential for dividend increase, undervalued and expected to see marginal improvement targets. The bank maintains its profit forecast and valuation for food and beverage stocks, and prefers U-Presid China (00220), Tingyi (00322), Wh Group (00288), Zhenjiu Lidu (06979), China Res Beer (00291), Mengniu Dairy (02319), and Yihai Intl (01579) listed in Hong Kong stock market.

CICC pointed out that the food and beverage industry showed weak recovery in the first half of the year, with strong travel demand while the recovery of the dining chain was slower than expected, and the recovery of beer, frozen food, and B-end condiments was relatively weak. The baijiu sector performed slightly better than expected during the Spring Festival, mainly due to the high volume of returning home and the holiday effect. After entering the off-season in the second quarter, consumption was relatively flat. Currently, market expectations for the sector are low, but the bank believes that the valuation of leading companies has fallen and the sector has long-term allocation value.

Looking ahead to the second half of the year, the bank believes that the food and beverage industry is expected to achieve a moderate recovery against the backdrop of sustained macro policies and consumption stimulus policies, which are closely related to expected resident income and CPI trends. In the baijiu sector, under the accelerated concentration and differentiation, leading liquor companies will accelerate the harvesting of industry share, and the probability of achieving annual performance targets for leading companies is relatively high. The mass market sector is expected to achieve stable and medium-term improvement in profitability due to cost reduction and efficiency improvement.