The food and beverage sector pulled back with the broader market today (October 22). By the close, Yiming Food fell more than 6%, while Yangyuan Beverage, Kuaijishan, and Lianhua Holdings each dropped more than 5%, weighing on sector performance. On the upside, some baijiu stocks stood out, with Kweichow Moutai Co.,Ltd., Jinshiyuan, and Yingjia Gongjiu closing higher against the market trend. The underlying sub-index of the Food and Beverage ETF Huabao (515710), the Subdivided Food Index, closed down 0.84%. Note: As of October 21, 2026, within the Subdivided Food Index, the weightings of Yiming Food, Yangyuan Beverage, Kuaijishan, Lianhua Holdings, Kweichow Moutai, Jinshiyuan, and Yingjia Gongjiu were 0.27%, 2.1%, 0.86%, 1.57%, 15.19%, 2.01%, and 0.89%, respectively.
Some market views hold that the second quarter of 2026 is a critical clearing period for baijiu, and after interim reports concentrated the release of risks, signals of an earnings bottom are gradually becoming clearer. Although Mid-Autumn Festival sell-through was generally lackluster and the price of Pu Wu declined, Feitian Moutai prices have stabilized for eight consecutive months, providing a foundation for marginal improvement in the industry ecology. Some analysts note that policy support for consumption is intensifying, with the National Development and Reform Commission clarifying three major measures to expand domestic demand, which, if implemented, would significantly catalyze a valuation recovery for the sector. At present, baijiu inventories, valuations, and expectations are all at low levels, and combined with the passage of time driving the clearing process toward completion, some names with high fundamental certainty may be the first to see earnings realization and a dual rise in earnings and valuation.
From a valuation perspective, the food and beverage sector remains at a low valuation. Data shows that as of yesterday's close (October 21), the price-to-earnings ratio of the Subdivided Food Index, the underlying index of the Food and Beverage ETF Huabao (515710), was 20.44 times, located at the low 13.5th percentile over the past 10 years (data source: Wind), highlighting its medium- to long-term allocation cost-effectiveness.
Looking ahead, Guosen Securities said that the market is currently in a gestation period for a new domestic demand narrative, and the fundamentals of the baijiu sector are expected to gradually stabilize in the second half of 2027. The fourth quarter is an important window to observe the intensive implementation of policies and their effects, while a substantial short-term improvement in demand still requires more evidence, and sector performance may be driven more by policy expectations, liquidity, and valuation switching. Active adjustments on the supply side and the gradual alignment of operating targets with channel capacity are conducive to accumulating conditions for a medium-term recovery. Orient Securities believes the industry is still in a bottoming phase where destocking comes first and price stabilization follows; with an earlier Spring Festival next year and a shorter stocking window, channels will not stock up heavily for a good start to the year, and Spring Festival sell-through is expected to see a narrowing decline but remain under pressure. However, with channel inventories at low levels and wholesale prices stabilizing, the medium- to long-term allocation value is gradually emerging.
For one-click exposure to the core assets of the food and beverage sector, focus on the Food and Beverage ETF Huabao (515710). According to China Securities Index Co. statistics, the Food and Beverage ETF Huabao (515710) tracks the CSI Subdivided Food and Beverage Industry Theme Index, with baijiu leaders accounting for nearly 50% of holdings. Off-exchange investors can also gain exposure to the core assets of the food and beverage sector through the Food and Beverage ETF feeder funds (Class A 012548, Class C 012549).
Data source: Shanghai and Shenzhen stock exchanges, etc., as of October 22, 2026. Institutional view sources: Guosen Securities' October 22, 2026 report "Baijiu Sector October Investment Strategy and 2026Q3 Outlook: Dual-Holiday Demand Continues to Bottom Out, Awaiting a Warming of Domestic Demand Expectations"; Orient Securities' October 18, 2026 report "Bottom Gradually Emerging: 2026 Autumn Sugar and Liquor Fair Feedback." Note: When investors subscribe to or redeem fund shares, subscription and redemption agent brokers may charge a commission of no more than 0.5%, which includes relevant fees charged by stock exchanges, registration institutions, and others. Fund fee rates are detailed in the fund legal documents.
Risk disclosure: The Food and Beverage ETF Huabao passively tracks the CSI Subdivided Food and Beverage Industry Theme Index, whose base date is December 31, 2004, and which was launched on April 11, 2012. The constituent stocks of the index are adjusted in due course according to the index compilation rules, and their back-tested historical performance does not predict the future performance of the index. The individual stocks mentioned in this article are only objectively listed as index constituents and are not recommendations for any individual stock, nor do they represent the fund manager or the fund's investment direction. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors must be responsible for any investment decisions they make independently. In addition, any views, analyses, and forecasts in this article do not constitute investment advice of any kind to readers, and the company assumes no responsibility for direct or indirect losses caused by the use of the content of this article. Investors should carefully read the Fund Contract, Prospectus, Fund Product Information Summary, and other fund legal documents to understand the risk-return characteristics of the fund and choose products suitable for their own risk tolerance. Past performance of a fund does not predict its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. According to the fund manager's assessment, the risk level of the Food and Beverage ETF Huabao is R3-medium risk, suitable for balanced (C3) and above investors, and the suitability matching opinion should be subject to the sales institution. Sales institutions (including the fund manager's direct sales institution and other sales institutions) conduct risk evaluations of the above funds in accordance with relevant laws and regulations, and investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various sales institutions are not necessarily consistent, and the fund product risk level evaluation results issued by fund sales institutions shall not be lower than the risk level evaluation results made by the fund manager. There are differences between the fund's risk-return characteristics in the fund contract and the fund risk level due to different factors considered. Investors should understand the risk-return situation of the fund, carefully choose fund products in light of their own investment objectives, horizon, investment experience, and risk tolerance, and bear the risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not indicate that it makes a substantive judgment or guarantee on the investment value, market prospects, and returns of the funds. Fund investment must be cautious. MACD golden cross signals have formed, and these stocks are rising well!
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