The food and beverage sector continued its downward trend today (December 4). The Food ETF (515710), which tracks the sector's overall performance, opened weak and remained in low-range consolidation, closing down 1.16%—marking its third consecutive daily decline.
Among constituent stocks, liquor companies led the losses, with some consumer staples also underperforming. By the close, Luzhou Laojiao, Shanxi Xinghuacun Fenjiu, and Shede Spirits plunged over 3%, while Jiugui Liquor, Shuijingfang, and Milkground dropped more than 2%, dragging down the sector.
On the news front, Kweichow Moutai recently held an extraordinary shareholders' meeting, approving proposals including director elections, interim profit distribution, and share buybacks. Newly appointed Chairman Chen Hua made his debut, engaging with investors on the theme of "sustaining high-quality growth and creating long-term value." General Manager Wang Li and management also addressed key investor concerns in detail.
SWS Research noted that Moutai’s core strengths remain intact: (1) Its brand moat is formidable, with deep channel profitability reinforcing its competitive edge. (2) Its business model excels in stable long-term earnings, high-quality cash flow, and robust ROE, ensuring sustainable returns. Mid-to-long-term projections suggest steady growth through the 15th Five-Year Plan period, underpinned by strong certainty. Notably, Moutai is the top holding of Food ETF (515710), accounting for 14.89% of the portfolio as of Q3 2025.
Valuations for the sector hover near historical lows, presenting a potential entry opportunity. As of December 3, the SSE Food Index tracked by Food ETF (515710) traded at a P/E of 20.45x—near the 7.05% percentile over the past decade—highlighting compelling mid-to-long-term value.
Guosen Securities anticipates a bullish 2026 for food and beverage, citing three drivers: (1) dividend appeal with room for valuation expansion, (2) resilient consumer (C-end) demand alongside faster recovery in commercial (B-end) scenarios, and (3) growth in health-focused innovations and digital supply chains.
Xiangcai Securities added that the sector’s low valuation percentile signals relative outperformance as market sentiment shifts, recommending focus on leaders with stable demand and risk resilience, as well as firms pivoting to high-growth niches.
For exposure to sector leaders, Food ETF (515710) tracks the CSI Food & Beverage Sub-Industry Index, with ~60% allocation to premium liquor stocks (e.g., Moutai, Wuliangye, Luzhou Laojiao) and ~40% to dairy, condiments, and beer giants 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 December 4, 2025.
Risk disclosure: Past performance does not guarantee future results. Investors should assess risk tolerance and consult fund documents before investing. Regulatory approval does not imply endorsement.
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