Market style rotation? The food and beverage sector is on track for a three-day winning streak, with analysts urging investors to seize the current low-level buying opportunity.

Gelonghui, October 16 | Following the dual festivals, assets categorized as 'small Deng' led by technology stocks experienced a significant pullback, while 'old Deng' assets represented by liquor rebounded. The Sub-Food Index rose by 0.34% today, aiming for a third consecutive gain, sparking market discussions on style rotation. Catalysts include: ① From an industry perspective, during the dual festival period, liquor sales overall declined by 20%-30%. After premium liquors such as Maotai dropped in price, their cost-performance ratio improved. As e-commerce subsidy activities for the upcoming Double Eleven gradually begin, wholesale prices can be continuously monitored. ② On October 15, Kweichow Maotai convened a marketing symposium for its Maotai Sauce Aroma Series, conveying positive signals: after entering September, terminal sales of various products under Maotai Sauce Aroma Liquor showed a notable month-over-month increase, with market vitality progressively being unleashed. ③ From October 16 to October 18, the China International Alcoholic Drinks and Food Exhibition (Sugar and Wine Fair) will be held in Nanjing. Guohai Securities believes that following the correction of the alcohol ban, marginal improvements have been observed, though the industry still requires time to recover. The worst phase of the fundamental business conditions has passed. ④ In September, the M2-M1 spread reached a new low for the year at 1.2 percentage points, indicating more funds have been converted into current loans, which aids consumption and investment. CITIC Construction Investment notes that China’s domestic economy is expected to stabilize and gradually rebound. Cyclical industries led by liquor are poised to re-enter a high-growth trajectory, and investors should value the current opportunity to position at lower levels. Currently, the PE(TTM) for the SSE Consumption Index is 21.73 times, standing at the historical percentile of 6.65% over the past decade; the PE(TTM) of the Sub-Food Index is 20.58 times, positioned at the historical percentile of 7.05% over the past decade. Notable relevant targets include leaders in the liquor sector: the Food & Beverage ETF (515170), which recorded net inflows for four consecutive days with a total inflow exceeding RMB 800 million. It tracks the Sub-Food Index and focuses on liquor, dairy products, seasonings, etc., with weighty stocks covering “Mao-Wu-Lu-Fen-Yang” (Kweichow Maotai, Wuliangye Yibin, Luzhou Laojiao, Shanxi Xinghuacun Fen Wine, Yanghe Brewery), absolute industry leaders. Full coverage of the liquor, food, and beauty care industrial chain: Consumer 30 ETF (510630), tracking the SSE Consumption Index, with weighty stocks including Inner Mongolia Yili Industrial Group, Kweichow Maotai, Shanxi Xinghuacun Fen Wine, while also encompassing Haitian, Angel Yeast (food additives), and Proya Cosmetics (beauty care).