The bank believes that the current rally in the baijiu sector is sustainable, with the industry now at the bottom of its cycle and a clear upward trajectory for fundamentals.
According to Zhitong Finance APP, Kaiyuan Securities released a research report stating that the recent strong rise in the liquor sector is driven by the convergence of policy, valuation, and fundamentals. The industry is at the bottom of its cycle, with demand recovery and policy optimization supporting sustainability expectations. The bottom-up recovery logic also applies to beer, condiments, and other food and beverage sub-industries that are at dual bottoms. Investment opportunities for mass consumer goods in 2026 can focus on three areas: snacks, raw milk/dairy products, and catering supply chains. Attention should be paid to risks such as economic downturns, policy changes, and weaker-than-expected demand recovery.
The main viewpoints of Open Source Securities are as follows:
Multiple factors converge to catalyze a strong rise in the liquor sector
The liquor sector has recently seen a strong rise, primarily driven by the叠加of multiple factors including macro policies, valuation positioning, and fundamentals, rather than a single variable. Specifically, at the macro level, recent continuous optimization of real estate policies and密集出台of pro-domestic-demand measures have effectively boosted market expectations for the recovery of consumption scenarios. In terms of valuation and positioning, after a deep adjustment earlier, the valuation of the liquor sector has fallen back to historical lows, while the proportion of active equity public funds holding stakes in the liquor sector has continuously decreased to 2.9% by Q4 2025, already within a bottom range, with a clear and reasonable positioning structure. At the fundamental level, recent unexpected performance in wholesale prices and sales volume of industry leader Kweichow Maotai Liquor became the core catalyst for the sector's rise, demonstrating the resilience of real terminal demand recovery in the liquor sector.
Clear logic of cyclical bottom recovery; optimistic about sustainable growth in the liquor sector
The bank believes this round of the liquor sector's rise has sustainability. The current industry is already in the bottom region of the cycle, with clear upward repair logic from fundamentals. First, demand for liquor shows a slow recovery trend. After the wholesale price of high-end liquor fell back to a reasonable range, it effectively stimulated real consumer demand. Coupled with the approach of the Spring Festival peak season, centralized release of demand from family gatherings, gift-giving scenarios, etc., the consumption-boosting effect brought by price declines gradually emerged. Second, after corrections to the alcohol ban, the negative impact of policies marginally decreases. From the recent recovery in consumption scenarios, the disturbance of policies on core consumer demand for liquor continues to weaken, stabilizing market expectations. Third, as the macro economy gradually stabilizes and pro-consumption policies continue to be issued, overall consumer market vitality is expected to recover, allowing the liquor industry to stabilize and rebound.
With subsequent demand recovery and policy reinforcement, multiple sub-sectors may replicate bottom-repair trends
The logic of bottom repair is not unique to the liquor sector but can extend to the entire food and beverage industry. Currently, multiple sub-sectors like beer, condiments, and frozen foods are in a dual-bottom area of valuation and fundamentals. Looking at the driving logic, if subsequent catalytic factors such as demand recovery in the catering industry and increased consumption policies materialize, multiple sub-sectors may replicate the repair trends of the liquor sector. Active attention is recommended.
Investment opportunities in mass consumer goods in 2026 will focus on retail, raw milk/dairy products, and catering supply chains
Focusing on 2026, investment opportunities in mass consumer goods will mainly lie in three细分directions: snack tracks, raw milk/dairy products, and catering supply chains. (1) The snack track remains highly prosperous. Leading enterprises, leveraging strategies like blockbuster products, multi-channel layouts, and cost advantages, see continuous improvement in net profit margins. Combined with the timing mismatch effect of the Spring Festival, the sector's performance in Q1 2026 is expected to achieve rapid growth. Targets like Weilong Delicious, Ganyuan Food, Yanjin Shop, and Ximai Food offer both growth potential and valuation advantages, thus are prioritized recommendations. (2) The raw milk sector sees continued optimization of supply-demand dynamics. Current milk prices are in a grinding bottom range, dairy cow inventories continue to shrink, and ranch losses drive inefficient capacity out. With the implementation of temporary anti-subsidy policies on EU dairy products, milk prices are expected to stabilize and rebound in 2026, benefiting upstream ranches and downstream dairy companies alike. Beneficiaries include You Ran Pasture, Yili Group, and Mengniu Dairy. (3) Catering supply chains benefit from the recovery of catering consumption, coupled with Spring Festival dining scenarios, and the industry is expected to see both volume and price increases. Tianwei Food is a key recommendation, with beneficiaries including Anguo Food, Qianwei Central Kitchen, and Guoquan Circle.
Risk warnings: Economic downturn, food safety issues, fluctuations in raw material prices, and slower-than-expected recovery in consumer demand.
