According to a research report from Guotai Haitong Securities, the allocation ratio for the food and beverage sector in Q4 2025 declined quarter-over-quarter. A detailed breakdown shows that the overweight positions in baijiu and non-baijiu sub-sectors decreased, while the allocation ratios for all other sub-sectors showed a sequential recovery, with beverages & dairy and leisure food leading the gains. The report suggests focusing on five key themes and paying attention to inflection point opportunities emerging from supply-demand rebalancing. 1) Stocks with price elasticity; 2) Beverage companies benefiting from strong travel demand, with a focus on low valuations and high dividends; 3) Growth stocks in snacks and food ingredients; 4) Beer; 5) Seasonings showing stability, livestock industry undergoing capacity reduction, and food supply expected to recover. The main views of Guotai Haitong are as follows: Investment recommendation: Focus on five key themes and value the inflection point opportunities under supply-demand clearing. 1) Stocks with price elasticity; 2) Beverages benefiting from good travel景气度, emphasizing low valuation and high dividends; 3) Growth targets in snacks and food ingredients; 4) Beer; 5) Seasonings are stable, livestock industry capacity is being reduced, and meal supply is expected to recover.
The proportion of active equity-oriented public funds' heavy allocations in the food and beverage sector continued to decline sequentially in Q4 2025. Based on the heavy allocation ratios of active equity-oriented public funds, the allocation ratio for food and beverage heavy holdings in Q4 2025 decreased by 0.14 percentage points quarter-over-quarter to 4.04%, ranking ninth among all sectors. The other top five allocated sectors were electronics, power equipment, communications, pharmaceuticals & biotechnology, and non-ferrous metals, with corresponding allocation ratios of 21.47% (QoQ -1.84 pct), 9.87% (-0.32 pct), 9.83% (+1.78 pct), 9.16% (-1.92 pct), and 7.83% (+2.12 pct) respectively.
Looking at sub-sectors, baijiu and non-baijiu saw reduced allocations, while the heavy allocation ratios for other sub-sectors increased, with leisure food and dairy & beverages receiving additional allocations. In Q4 2025, the heavy allocation ratio for baijiu decreased by 0.29 percentage points quarter-over-quarter to 2.92%. This reduction was driven by a sequential decline in the heavy allocation ratios of baijiu leaders like Wuliangye and Shanxi Fenjiu, as well as regional baijiu leader Gujing Gongjiu. Among other sub-sectors, all showed recovery except for non-baijiu, which saw a slight decrease. The allocation ratios for non-baijiu, food processing, beverages & dairy, leisure food, and seasoning & fermentation products were 0.15% (QoQ -0.07 pct), 0.13% (+0.05 pct), 0.44% (+0.06 pct), 0.26% (+0.07 pct), and 0.14% (+0.04 pct), respectively.
Changes in the allocation ratios for individual stocks within the food and beverage sub-sectors were divergent in Q4 2025. Among the stocks heavily held by public funds across the food and beverage sub-sectors: 1) Baijiu: The heavy allocation ratios for both baijiu leaders and regional baijiu enterprises declined sequentially in Q4 2025, leading to a sector-wide reduction. 2) Non-baijiu (e.g., Beer): The sub-sector overall saw a reduction, but China Resources Beer's heavy allocation ratio increased quarter-over-quarter. 3) Beverages & Dairy: The sub-sector saw a sequential increase in allocation. Within it, dairy leaders Yili Industrial Group and Mengniu Dairy saw their heavy allocation ratios rise; livestock companies Youran Dairy, Modern Dairy, and Tianrun Dairy also saw increases, while beverage company Dongpeng Beverage saw its heavy allocation ratio decrease. 4) Leisure Food: The heavy allocation ratios for snack channel company Wanchen Group, as well as Ximai Food, Ganyuan Food, and Qiaqia Food, increased quarter-over-quarter. 5) Seasoning Sector: The sub-sector saw a sequential increase in allocation. Within it, Angel Yeast, Zhongju High-tech, Tianwei Food, and Yihai International saw the most significant increases in heavy allocation ratios, while Haitian Flavouring & Food saw a decline. 6) Food Processing: The sub-sector saw a sequential increase in allocation. Within it, Anjoy Food, Babil Food, Guoquan, and By-health saw the most prominent increases in their heavy allocation ratios.
Risk warnings include increased macroeconomic volatility, intensified industry competition, and food safety risks.
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