On November 21, the food and beverage sector rose. Penghua Fund Liquor ETF, Huaxia Fund Food and Beverage ETF, China Merchants Fund Food and Beverage ETF, China Southern Fund Food and Beverage ETF, China Southern Fund Food ETF, Huaan Fund Food and Beverage ETF, Fund Huabao Fund Food ETF, and Bosch Fund's main consumer ETF rose.

According to the news, on the evening of November 20, Kweichow Moutai announced a special dividend plan to return shareholders. The company plans to implement a special dividend for shareholders within 2023 based on the total share capital of the company on the day of implementation of equity distribution and equity registration. It plans to distribute a cash dividend of 19.106 yuan per share (tax included) to all shareholders. As of September 30, 2023, the total share capital of the company was 1,256 billion shares. Based on this calculation, the total cash dividend to be distributed is 24 billion yuan (tax included).

The company stated that the purpose of this special dividend is, first, the need for the company's continuous, stable and healthy development; second, to increase cash dividends and boost market confidence on the premise that the company's normal operations and long-term development are not affected; third, to positively reward shareholders, share the company's development dividends with shareholders, and enhance the sense of gain of the majority of shareholders.

Since February 2021, the food and beverage sector, led by liquor, has continued to decline. Alcohol ETFs, food and beverage ETFs, and consumer ETFs have fallen by more than 10% this year.

Regarding the liquor sector, CITIC Construction Investment believes that some wine companies are close to completing their 2023 sales tasks and are beginning to formulate sales plans for the new year. Focusing on current channel inventories and judgments on the competitive situation, it is expected that leading wine companies will still be able to use their product and channel advantages next year to achieve strong performance growth, such as the driving force of Maotai's price increase, the refined growth space for Guojiao channel operations, and the continuous increase in the sales rate of Qinghua Fenjiu. Judging from the transaction situation, the liquor sector is currently in a state of “low sentiment” and “low expectations”. The valuation scores have all fallen back to historically low levels. The valuation advantage corresponding to 2024 is outstanding, and emphasis is placed on liquor allocation opportunities.

Wanlian Securities said that at present, the fundamentals of liquor are continuing to be repaired, but the market's expectations for the long-term growth rate of liquor have fallen to a freezing point, and valuations have also fallen back to previous lows, so the sector already has a foundation for growth. Unlike the pessimistic sentiment caused by dealers not making money, liquor terminal sales maintained good growth in September-October. According to Social Zero data released by the National Bureau of Statistics, the monthly social zero data for tobacco and alcohol increased by 23.1% and 15.4% respectively in September-October, and a cumulative increase of 10.3% in January-October. Whether monthly or cumulative, it is one of the fastest-growing segments, reflecting the resilience of consumer demand in the liquor industry. Since the base figure for November-December last year began to decline, industry sales are expected to achieve flexible growth under a low base in the next two quarters. Also, next year's Spring Festival is about 20 days behind this year. The off-season is longer and there is more time to digest inventory, so there is a high probability that next year's Spring Festival will get off to a good start. The market's concerns about sector demand are concerns about macro-demand from the top down. As long as there is some external catalysis, the sector will usher in overall opportunities. Currently, favorable factors for the industry are constantly accumulating: external macroeconomics is improving, and economic policies are frequent; Maotai's price increases are meaningful, and sales maintain a positive trend; valuations are fully digested, next year's growth is guaranteed, pessimistic expectations are sufficient, valuations are low, and valuations are low, waiting for sentiment to reverse and external catalysts.

In terms of fund allocation, in the third quarter of 2023, the proportion of heavy holdings in the food and beverage industry rose to 6.73% (+0.51pct over the previous quarter), up 1 place from the previous quarter, returning to first place, but it is still below the average fund position ratio since the first quarter of 2018. The level of heavy fund position allocation in the food and beverage industry is still high. In the third quarter of 2023, the market value of heavy stock holdings accounted for 14.98% (+1.37pcts month-on-month), and the overallocation ratio was 7.18% (+1.06 pcts month-on-month).

Wanlian Securities said that in the third quarter of 2023, the proportion of heavy stocks in the food and beverage sector bottomed out and rebounded, and the overallocation ratio rose sharply, rising 1.06pcts to 7.18%. Mainly, the allocation ratio in the liquor sector increased, but the allocation ratio in the mass goods sector continued to decline. Overall, the heavy position ratio of funds in the food and beverage sector is still below the historical average position ratio level. In the context of a weak macroeconomic recovery, valuations in the food and beverage sector are still under pressure, but there are signs of stabilization with the support of consumer stimulus policies.