The food and beverage sector experienced a sudden surge in strength during the afternoon session today (December 25). The Huabao Food & Beverage ETF (515710), which reflects the overall trend of the consumption sector, hovered near the flat line throughout the morning but abruptly climbed higher in the afternoon. Its intraday price reached a maximum gain of 1.01%, closing up 0.84% for the day.
Among the constituent stocks, baijiu (Chinese liquor) producers led a broad-based advance. By the market close, Sichuan Swellfun Co., Ltd. hit the daily upside limit, while Jinhuiqu Co., Ltd. rose 3.08%, and Jiugui Liquor Co., Ltd. gained 3%. Major industry leaders including Kweichow Moutai Co., Ltd., Wuliangye Yibin Co., Ltd., Luzhou Laojiao Co., Ltd., Shanxi Xinghuacun Fen Wine Factory Co., Ltd., and Yanghe Brewery Joint-Stock Co., Ltd. all closed in positive territory.
On the news front, the 2025 (22nd) "World's 500 Most Influential Brands" ranking was unveiled on December 17. Kweichow Moutai secured the 214th position overall, while Wuliangye Yibin ranked 216th. Notably, among the top 10 oldest brands, four were alcoholic beverage companies: Moutai (ranked 3rd), Martell (4th), Rémy Martin (6th), and Moët & Chandon (8th).
Analysis suggests that the high rankings of both Moutai and Wuliangye in the "World's 500 Most Influential Brands," coupled with Moutai's inclusion among the top three oldest global brands, underscore the profound brand heritage and worldwide influence of Chinese baijiu. These prestigious positions are expected to enhance brand premium and international recognition, facilitating overseas market expansion in line with their globalization strategies.
It is important to note that Kweichow Moutai and Wuliangye Yibin are the top two holdings of the Huabao Food & Beverage ETF (515710). According to the fund's periodic report, as of the end of the third quarter of 2025, their respective weightings in the fund were 14.89% and 14.65%.
From a valuation perspective, the food and beverage sector is currently trading at historically low levels, potentially presenting a favorable opportunity for strategic, contrarian positioning. Data shows that as of yesterday's close (December 24), the price-to-earnings ratio of the SSE Sub-index of Food & Beverage, which the Huabao Food & Beverage ETF (515710) tracks, stood at 20.11 times. This places it at the 5.48th percentile over the past decade, highlighting significant medium-to-long-term investment value.
Looking ahead, AJ Securities indicated that liquor companies are entering a phase of accelerated operational clearing. As policy pressures gradually subside and consumption-stimulus measures take effect, demand is expected to experience a modest recovery. The industry currently trades at low valuations with pessimistic expectations largely priced in, suggesting that the path for industry consolidation will become clearer and the market bottom more defined. For the long term, high-quality leading companies with strong earnings certainty are the preferred choice during this industry adjustment period.
Kaiyuan Securities expressed that the consumer sector is currently entering a strategic period of intensive policy support. As a core segment of essential consumption, the food and beverage industry is poised to benefit directly from strategies aimed at boosting domestic demand. The industry's core advantages are shifting towards health and quality, and with easing cost pressures, the profit resilience of leading enterprises is becoming more apparent. The baijiu sector may be nearing the end of its bottoming phase, with a valuation recovery anticipated for leading players possessing strong brand power and diversified product portfolios across price segments. Sub-sectors like dairy and beer are expected to see a potential bottom reversal, aided by supportive policies and low base effects.
For consolidated exposure to core assets in the food and beverage sector, the Huabao Food & Beverage ETF (515710) is a key instrument to watch. According to China Securities Index Co., Ltd., this ETF tracks the CSI Sub-index of Food & Beverage Industry Theme. It allocates approximately 60% of its portfolio to leading high-end and premium baijiu stocks, with nearly 40% dedicated to leaders in sub-sectors such as beverages, dairy products, condiments, and beer. Its top ten holdings include industry giants like Moutai, Wuliangye, Luzhou Laojiao, Shanxi Fenjiu, Yanghe, as well as Yili Industrial Group Co., Ltd. and Foshan Haitian Flavouring & Food Company Ltd. Investors seeking off-exchange access can also participate through the fund's feeder funds, Huabao Food & Beverage ETF Connect Fund (Class A: 012548 / Class C: 012549).
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