Guosen Securities: Diversified Demand and Supply Upgrades to Sustain Structural Opportunities in Consumer Staples

Stock News12-11

Guosen Securities released a research report highlighting investment opportunities driven by new consumption trends and supply-side upgrades. The firm identified five key investment themes for the consumer staples sector in 2026:

1) High-quality, cost-effective product and service transformations, including upgrades to traditional offline retail formats and differentiated offerings with premium quality or emotional value. 2) High-growth categories with rising penetration rates, particularly health-focused products replacing similar items. 3) Recovery expectations for heavily impacted industries like alcohol, catering, and animal husbandry. 4) Stocks with strong earnings certainty driven by company-specific logic. 5) High-dividend or high-shareholder-return targets.

**2025 Review: Weak Domestic Demand and Sector Slowdown** China’s urban per capita disposable income grew 4.4% YoY in the first three quarters of 2025, reflecting slower growth and subdued consumer confidence. Mid-year alcohol restrictions further dampened sentiment. The food and beverage sector underperformed, declining 5.3% YTD and lagging the CSI 300 by 19.4 percentage points. Soft drinks remained resilient, while snack producers showed mixed performance—discount snack leaders expanded stores, and konjac-based snacks emerged as bright spots.

**2026 Outlook: Structural Opportunities Amid Channel and Supply Evolution** Assuming moderate demand recovery, Guosen expects structural opportunities to persist. Key trends include: - **Channel Diversification**: Offline retail upgrades and instant retail adoption will require firms to optimize distribution networks. - **Supply-Side Innovation**: As macroeconomic policies stabilize profits and consumer confidence improves, demand will shift from extreme price sensitivity to balanced quality-value propositions. Broader criteria like convenience, health benefits, and emotional appeal will shape purchasing decisions, expanding innovation potential for suppliers.

**Risks**: Macroeconomic volatility, intensified industry competition, surging raw material costs, and capital market fluctuations.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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