The food and beverage sector adjusted alongside the broader market today (March 19). Huabao's Food and Beverage ETF (515710), which reflects the overall trend of the sector, experienced sustained low-level fluctuations after opening. As of the time of writing, its price had declined by 0.71%.
Regarding constituent stocks, both baijiu and consumer staple segments performed poorly. As of writing, Jinhe Industrial fell 3%, while Jiugui Liquor and Jinhuijiu dropped over 2%. Leading decliners such as Kweichow Moutai, Wuliangye, and Luzhou Laojiao also weighed on the sector's performance.
Recent industry data indicates that the Spring Festival holiday period unleashed unexpectedly strong consumer momentum, with significant growth in catering and tobacco/alcohol consumption for January-February. Furthermore, within specific segments, companies like Shanxi Fenjiu are actively developing new market growth points by extending product lines and launching personalized custom liquors.
Zheshang Securities pointed out that the baijiu sector remains at a bottom range. Under a new balance of volume and price, leading liquor companies have seen a turnaround in sales volume upwards. The implementation of Moutai's agency sales policy helps stabilize channel profits and maintain price stability, effectively boosting market confidence.
Ping An Securities noted that the darkest period for baijiu has passed, with a sustained recovery expected by 2026. The sector currently features low valuations, low holdings, and high dividend yields, providing strong downside support. Moutai's proactive release of Feitian Moutai at 1,499 yuan is expected to help wholesale prices reflect consumer attributes better, increase consumer reach, and accelerate industry consolidation. From a price indicator perspective, the narrowing decline in the Producer Price Index (PPI) suggests a continued recovery trend, indicating the baijiu cycle has largely bottomed out.
From a valuation standpoint, the food and beverage sector remains at low levels. Data shows that as of yesterday's close (March 18), the price-to-earnings ratio of the Sub-index for Food, the underlying index for Huabao's Food and Beverage ETF (515710), was 19.96 times, positioned at the 5.88th percentile over the past decade, highlighting its medium to long-term allocation appeal.
Looking ahead, Sinolink Securities expressed optimism about the current allocation value of the baijiu sector, citing favorable odds under low expectations, especially during periods of market volatility influenced by external risk events. Expectations are leading; even during the post-holiday off-season, there exists potential for top-down catalysts. As "anti-involution" policies continue to be implemented, corporate Return on Equity (ROE) is expected to improve, translating into increased corporate expenditures such as entertainment, alongside improved household income expectations, suggesting the industry's inflection point is gradually approaching.
For one-stop allocation to core assets in the food and beverage sector, focus on Huabao's Food and Beverage ETF (515710). According to China Securities Index Co., Ltd., this ETF tracks the CSI Sub-index for Food & Beverage Industry Theme, with leading baijiu holdings accounting for nearly 60% of the portfolio. Top ten holdings include companies such as Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Fenjiu, Yanghe Brewery, as well as Yili Industrial Group and Foshan Haitian Flavouring & Food Co., Ltd. Off-exchange investors can also access core sector assets through the Food and Beverage ETF Link Fund (Class A: 012548 / Class C: 012549).
Note: When subscribing for or redeeming fund units, subscription/redemption agents may charge a commission of up to 0.5%, which includes relevant fees charged by stock exchanges and registration institutions. Please refer to the fund's legal documents for detailed fee schedules.
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