On November 21, amid a broad market pullback, the food and beverage (F&B) sector demonstrated resilience, ranking among the top three performers out of 30 CITIC primary industries. The Food ETF (515710), which tracks the overall trend of the F&B sector, initially rose in early trading before retreating with the broader market, closing down 1.29%.
Among its constituents, Yunnan Energy Investment plummeted 7.73%, while Jiugui Liquor and Kingdomway Group both fell over 4%. Bright Dairy, Jinzhao Liquor, and Guyuelongshan followed with declines exceeding 3%, dragging down the sector.
Recent data from the China Alcoholic Drinks Association on November 18 revealed that Kweichow Moutai's 1935 product has seen year-over-year sales growth exceeding 20% in Guangdong, Shandong, Jiangsu, and Yunnan since Q3, with some markets reporting over 30% growth. Certain distributors achieved monthly sales of 10 tons, with a bottle-opening rate surpassing 70%, prompting multiple dealers to request increased allocations for next year.
Analysts note that Kweichow Moutai's 1935 strong Q3 sales performance highlights its regional market expansion. High bottle-opening rates and positive distributor feedback indicate growing acceptance across both supply chains and consumers. This trend may bolster the company’s series liquor strategy and influence market valuations for the sub-premium baijiu segment.
Valuation metrics suggest the F&B sector is historically undervalued, presenting a potential left-side allocation opportunity. As of November 20, the Segmented Food Index tracked by Food ETF (515710) had a P/E ratio of 21x, near a 10-year low at the 10.2% percentile, underscoring its mid-to-long-term appeal.
Oriental Securities forecasts a "higher floor, lower ceiling" scenario for the F&B sector starting in 2026, with fundamentals likely bottoming out. They anticipate gradual recovery in catering supply chains and beer sectors by 2025, followed by narrowing revenue declines in baijiu by Q1 2026, leading to a sector-wide earnings trough.
CITIC Securities highlights that after prolonged corrections, the F&B sector—particularly baijiu—now trades at depressed valuations with clear bottoming signals. Key focus areas include baijiu, snacks/health products, beverages, dairy, and catering supply chains.
For exposure to core F&B assets, Food ETF (515710) offers concentrated allocations: ~60% to premium/sub-premium baijiu leaders (e.g., Kweichow Moutai, Wuliangye, Luzhou Laojiao) and ~40% to beverage, dairy, condiment, and beer leaders like Yili and Haitian Flavouring. Off-exchange investors can access the sector via the ETF’s feeder funds (Class A 012548/Class C 012549).
Data source: SSE/SZSE, as of November 21, 2025.
Risk disclosure: Past performance does not guarantee future results. Investors should assess risk tolerance and consult fund documents before investing.
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