Wanlian Securities released a research report projecting that the food and beverage industry will focus on bottoming out and recovery in 2026. Due to demand recovery, cost improvements, and industry differentiation, structural investment opportunities are expected to emerge. The firm recommends focusing on: 1) Leading baijiu producers with low valuations and high dividends, whose channel inventories are expected to be cleared by 2026; 2) Leading companies in the beer, condiment, and dairy sectors benefiting from demand recovery and cost improvements; 3) Leading frozen food companies experiencing eased price wars and actively embracing new sales channels; 4) Leading soft drink manufacturers with competitive advantages in the high-growth functional beverage segment. Wanlian Securities' key views are as follows:
As of March 10, 2026, 60 companies in the food and beverage sector have issued performance forecasts, representing a disclosure rate of 47%. Among these companies, the sector's profit forecast ratio for 2025 was 52%, down from 69% in 2024, ranking fifth among the eight major consumer industries. Analyzing specific performance forecast types, the loss situation worsened compared to 2024. The proportion of companies turning losses into profits dropped significantly from 24% to 5%, while the proportions of companies reporting initial losses and continued losses increased from 13%/22% in 2024 to 18%/30%, respectively. The proportion of companies forecasting profit growth declined from 17% to 13%, those forecasting slight growth fell from 4% to 3%, and the proportion forecasting profit decreases rose from 20% to 28%.
Looking at secondary sub-sectors, within the food and beverage segments in 2025, apart from the non-baijiu and condiment/fermented product segments which saw an increase in the proportion of companies forecasting growth, most other segments saw the proportions for pre-growth and slight growth remain flat or decline compared to 2024. Simultaneously, the baijiu, snack food, and food processing segments experienced a significant increase in the proportion of companies forecasting profit decreases, indicating continued performance pressure in certain sub-sectors during 2025. Furthermore, the proportion of companies turning losses around decreased in the vast majority of segments, while the proportion reporting continued losses generally rose, suggesting an intensification of overall industry losses.
The food and beverage industry's performance growth is slowing, with a full-year 2025 profit forecast ratio of 52%. As of March 10, 2026, among the 128 A-share companies in the sector, 60 have issued performance forecasts, resulting in a 47% disclosure rate, ranking sixth among the eight major consumer industries. Among all companies that have issued forecasts, 31 food and beverage companies are expected to be profitable for 2025, yielding a sector profit forecast ratio of 52%, down from 69% in 2024 and ranking fifth among the eight major consumer industries.
Analyzing specific forecast types, the industry's loss situation intensified compared to 2024. The proportion of companies turning losses into profits plummeted from 24% to 5%, while the proportions for initial losses and continued losses increased from 13%/22% in 2024 to 18%/30%, respectively. Affected by slowing consumer market growth and intensified competition, performance growth slowed for some companies. The proportion forecasting profit growth fell from 17% to 13%, those forecasting slight growth declined from 4% to 3%, and the proportion forecasting profit decreases rose from 20% to 28%.
Snack foods lead in profit forecast ratio, but performance forecast types are divergent. In terms of disclosure rates, the snack food and beverage/dairy segments have rates exceeding 50%, at 61% and 56% respectively. The food processing, baijiu, and non-baijiu segments have disclosure rates of 48%, 45%, and 44% respectively, while the condiment/fermented products segment has a disclosure rate of only 13%. Regarding profit forecast ratios: the snack food, baijiu, and beverage/dairy segments have ratios exceeding 50%, at 57%, 56%, and 53% respectively. The condiment/fermented products segment has a ratio of 50%, while the food processing and non-baijiu segments have ratios below 50%, at 46% and 43% respectively.
Analyzing the proportion of forecast types within secondary sub-sectors: The baijiu segment is under significant performance pressure with widening losses; the proportion forecasting profit decreases rose sharply to 56%, while the proportions for initial and continued losses both doubled to 22%. The non-baijiu segment shows a polarized performance trend; the proportion forecasting growth increased significantly from 13% to 29%, and the proportion forecasting decreases fell to 14%, but the loss situation worsened, with initial losses rising to 14% and continued losses increasing to 43%. The beverage/dairy segment shows weakened overall growth momentum and pressure on profit recovery; the proportion forecasting growth fell from 25% to 13%, turning losses into profits dropped from 17% to 7%, and continued and initial losses increased to 27% and 20% respectively. The snack food segment experienced a significant slowdown in performance growth and increased downward pressure; the proportion forecasting growth fell sharply from 33% to 14%, the proportion forecasting decreases rose from 11% to 29%, and the proportion turning losses into profits dropped to 7%. The condiment/fermented products segment exhibits polarization; the proportion forecasting growth surged to 50%, while the proportion for continued losses skyrocketed from 25% to 50%. The food processing segment faced significant obstacles in profit improvement; the proportion forecasting growth remained at 8%, but the proportion forecasting decreases surged to 31%, the proportion turning losses into profits fell from 42% to 8%, and the proportion for continued losses increased to 38%.
Risk factors include: slower-than-expected macroeconomic recovery, significant fluctuations in raw material prices, intensified industry competition, policy risks, and food safety risks.
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