The food and beverage sector surged against the market trend today (December 12). The Food ETF (515710), which reflects the overall performance of the sector, opened with fluctuations before climbing steadily, rising 1.03% by the time of reporting.
Among the constituent stocks, liquor companies led the charge. Jiugui Liquor Co., Ltd. soared over 6%, while Shede Spirits surged more than 4%. Other notable gainers included Gujing Distillery, Luzhou Laojiao, and Yingjia Distillery, each up over 2%. Industry giants such as Kweichow Moutai, Wuliangye, and Shanxi Xinghuacun Fen Wine Factory also posted significant gains.
Recent data from the National Bureau of Statistics showed that November's consumer price index for alcoholic beverages remained flat month-on-month but declined 1.7% year-on-year. From January to November 2025, prices fell 1.9% compared to the same period last year. Analysts noted that while the year-on-year dip in liquor prices might seem concerning, it reflects a rational industry adjustment—actively reducing inventory and stabilizing channel prices to lay a solid foundation for future growth. This shift may redirect market focus from short-term price volatility to long-term brand value and supply chain resilience. Moderate price corrections could help eliminate market bubbles and accelerate industry consolidation, benefiting leading players.
Valuation-wise, the food and beverage sector remains at historically low levels, presenting a favorable opportunity for strategic positioning. As of December 11, the price-to-earnings ratio of the CSI Sub-Index for Food stood at 19.97x, near a 10-year low at the 4.71% percentile, highlighting its long-term investment appeal.
CITIC Securities pointed out that while short-term pressure from Moutai's wholesale price decline persists, potential policy-driven consumption catalysts in December could provide support. With valuations at relative lows, the bottom logic for liquor and other quality assets remains clear. Consumer staples, particularly those with niche growth drivers, may outperform liquor in the near term, though liquor demand is expected to rebound ahead of the Lunar New Year.
Zhongtai Securities added that retail sales growth slowed in the second half of 2025 due to high base effects and reduced subsidies. Mid-term challenges, including sluggish income growth and weak macro recovery, suggest a gradual recovery in domestic demand. Looking ahead to 2026, opportunities may arise from supply-side optimizations, new product categories, and policy-driven consumption boosts.
For exposure to core assets in the sector, investors can consider the Food ETF (515710), which tracks the CSI Sub-Index for Food and Beverage. Approximately 60% of its holdings are in premium and mid-premium liquor leaders, with the remaining 40% allocated to dairy, condiments, and beer sector leaders. Top holdings include Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Xinghuacun Fen Wine Factory, Yanghe Brewery, Yili Group, and Haitian Flavouring.
Risk Disclosure: The Food ETF passively tracks the CSI Sub-Index for Food and Beverage, with historical performance not indicative of future results. Individual stock mentions are for illustrative purposes only and do not constitute recommendations. Investors should carefully review fund documents and assess risk tolerance before investing.
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