The food and beverage sector experienced a market-wide pullback today (March 26). The Huabao Food and Beverage ETF (515710), which reflects the overall trend of the sector, saw volatile and weakening performance. As of this report, its on-market price had fallen by 1.09%.
Among the constituent stocks, baijiu (Chinese liquor) companies led the declines. At the time of writing, Gujing Gongjiu fell over 3%, while Jiangsu King's Luck Brewery, Shede Spirits, and Yingjia Gongjiu each dropped more than 2%. Major players including Kweichow Moutai, Wuliangye, Luzhou Laojiao, and Shanxi Xinghuacun Fenjiu collectively traded lower.
On the news front, according to market information, Moutai Culture and Tourism Co., Ltd., a wholly-owned subsidiary of Kweichow Moutai Group, has begun increasing the supply of Moutai products. It is reported that the subsidiary is selling Moutai at the China Wine Culture Museum in a package deal consisting of "one bottle of premium Moutai (3,299 yuan/bottle) plus two bottles of Feitian Moutai (1,499 yuan/bottle)," with a daily limit of 100 sets.
Kaiyuan Securities pointed out that from a long-term perspective, investment in the baijiu sector exhibits clear cyclicality and is currently at a bottom in terms of both performance and valuation. The fact that Moutai's wholesale price has bottomed out and begun to rebound amid increased supply indicates that demand for leading brands has essentially found support, suggesting the sector is entering a consolidation phase. The firm sees current levels as attractive for allocating to baijiu stocks.
From a valuation standpoint, the food and beverage sector remains at a low level. Data shows that as of yesterday's close (March 25), the PE ratio of the Segmented Food Index, which the Huabao Food and Beverage ETF (515710) tracks, was 19.21 times. This places it at the 1.57 percentile over the past 10 years, highlighting the compelling cost-effectiveness for medium to long-term allocation.
Looking ahead, Oriental Securities stated that the sector is now entering the earnings disclosure season. Considering consumer spending power, segments within food and beverage, particularly high-end consumption and cyclical segments, still face significant earnings revision pressures. Specifically, baijiu, beer, and dairy products are dealing with short-term destocking and pricing pressures. Whether the earnings disclosed in the 2025 annual reports and 2026 Q1 reports for related stocks will be revised down to the "bottom" or "steady state" anticipated by investors is crucial. If the downward revisions are sufficient, led by the baijiu sector, the food and beverage sector may gradually transition from a rebound phase to a reversal phase.
For streamlined exposure to core assets in the food and beverage sector, focus on the Huabao Food and Beverage ETF (515710). According to China Securities Index Co., Ltd., this ETF tracks the CSI Segmented Food & Beverage Industry Index, with leading baijiu holdings accounting for nearly 60% of its portfolio. Its top ten holdings include Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Xinghuacun Fenjiu, Yanghe Brewery, Inner Mongolia Yili Industrial Group, and Foshan Haitian Flavouring and Food Company. Off-market investors can also gain exposure to these core assets through the ETF's feeder funds (Class A: 012548 / Class C: 012549).
Note: When subscribing for or redeeming fund shares, subscription and redemption agents may charge a commission of up to 0.5%, which includes fees levied by stock exchanges and registration institutions. For detailed fund fee rates, please refer to the fund's legal documents.
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