Kaiyuan Securities has released a research report indicating that market expectations and valuations for the food and beverage sector are currently at low levels, with a high probability of significant improvement in capital allocation willingness in the future. Investors are advised to actively position themselves in the sector. For consumer goods, three main investment themes are recommended: first, the snack segment which shows upward medium-term momentum; second, the raw milk and dairy industry, where milk prices are expected to stabilize by 2026, potentially benefiting upstream farms and midstream dairy processors first; third, the restaurant supply chain sector, which may gain from the ongoing recovery in dining-out scenarios. Key points from Kaiyuan Securities are as follows:
Spring Festival consumption was concentrated and released strongly, leading to improved retail sales data. Major companies are worth watching. Retail sales in January-February 2026 showed steady recovery, with growth accelerating compared to December 2025. Categories such as grain and oil foods, as well as tobacco and alcohol, achieved double-digit growth, primarily due to the timing of the Spring Festival holiday, which concentrated holiday spending in January and February.
Within sub-sectors, for baijiu (Chinese liquor), priority should be given to leading companies, with focus on Kweichow Moutai, Luzhou Laojiao, and Shanxi Xinghuacun Fenjiu. Other recommended stocks include Ganyuan Foods, Xima Food, Weilong Delicious, Youran Dairy, and Inner Mongolia Yili Industrial Group. Beneficiaries may also include Anjoy Foods and Guoquan Shouguo.
Retail sales growth in January-February 2026 increased compared to the previous month, with grain and oil foods and tobacco and alcohol showing strong double-digit growth. Total retail sales of consumer goods rose by 2.8% year-on-year, accelerating by 1.9 percentage points from December 2025. This improvement was mainly due to the Spring Festival falling in mid-to-late February, concentrating holiday spending in the first two months of the year, coupled with a longer holiday period than usual, amplifying the festive consumption effect.
Catering revenue and revenue from above-scale catering enterprises increased by 4.8% and 4.7% year-on-year, respectively, in January-February 2026, accelerating by 2.6 and 5.8 percentage points from December 2025. Increased population mobility and recovery in consumption scenarios contributed to stronger catering growth.
Sales of grain and oil foods, beverages, and tobacco and alcohol grew by 10.2%, 6.0%, and 19.1% year-on-year, respectively, in January-February 2026, accelerating by 6.3, 4.3, and 22.0 percentage points from December. The essential nature of grain and oil foods was evident, while tobacco and alcohol saw significant growth, largely due to concentrated baijiu consumption during the Spring Festival. Beverages maintained steady growth, benefiting from the recovery in social dining scenes.
Retail sales and catering data growth in the first quarter of 2026 are expected to improve compared to the fourth quarter of 2025, as Q1 fully covers Spring Festival holiday consumption. Demand for visiting relatives and friends, family banquets, and cultural tourism dining concentrated during this period, supported by various pro-consumption policies, leading to sequential improvement in consumer categories. Specifically, the year-on-year growth rate of consumer goods retail sales in January-February 2026 was 1.2 percentage points higher than in Q4 2025. Catering and above-scale catering growth rates increased by 1.8 and 3.5 percentage points, respectively. Among consumer goods, growth rates for grain and oil foods, beverages, and tobacco and alcohol improved by 3.9, 2.0, and 20.1 percentage points compared to Q4 2025. Given the Spring Festival boost, essential consumer demand is expected to remain favorable in Q1 2026, with grain and oil foods and tobacco and alcohol likely to sustain good growth momentum.
The food and beverage industry exhibited structural differentiation during the Spring Festival, with a continued trend of concentration toward leading companies. In the baijiu sector, demand for high-end baijiu as gifts remained robust, with core products from Moutai and Wuliangye achieving positive year-on-year sales growth. Post-holiday wholesale prices remained stable and reasonable, and channel inventories stayed healthy. In the consumer goods sector, catering-related segments continued their recovery, with steady growth in business-to-business consumption and stable essential demand in business-to-consumer markets, supporting improved profitability for leading catering enterprises.
Risks include fluctuations in raw material prices, market operational risks, and food safety concerns.
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