The Zhitong Finance App learned that Huachuang Securities released a research report saying that the current food and beverage investment has a similar allocation of “bullish options”: dividend rates provide a sufficient margin of safety, and macroeconomic stability consolidates the bottom. One of the profit margins comes from rising valuation in an environment of easy liquidity, and the other is from policy transmission to a recovery in demand. Leading companies with excellent long-term commercial attributes and outstanding competitiveness are currently in a rare definitive allocation window, and judging from the incremental capital structure of the market, ETF capital entry will directly benefit Maotai (600519.SH), Wuliangye (000858.SZ), Luzhou Laojiao (000568.SZ), Fenjiu (600809.SH), and weighted stocks such as Yili () and Haitian (). 600887.SH 603288.SH

The main views of Huacheng Securities are as follows:

Food and beverage as a whole: the bottom is established, the upward direction is clear, the burden is unloaded in 24 years, and the 25 are young and put into battle. Since the end of September, a series of national macroeconomic policies and measures have been introduced at an accelerated pace, reversing the market's pessimistic expectations of continued sluggish demand and a negative spiral in the performance of listed companies. Furthermore, with the sharp decline in valuations in the first three quarters of this year, the bank believes that the bottom of the sector has been established and the direction of marginal improvement is clear. Looking ahead to next year, the inventory and reporting risks of listed companies such as condiments, dairy, beer, and liquor will be cleared one after another in '24, and various sub-industries are expected to move from inventory clearance to recovery in 25. The scale effect is expected to drive the profit forecast downward cycle into an upward cycle. In addition, B-side supply chain companies related to catering are highly sensitive to downstream food demand due to the transmission influence of the non-inventory cycle, and may directly benefit from macroeconomic stimulus policies for service consumption such as food and beverage vouchers. After major adjustments, related enterprises are expected to experience a reversal of high elasticity under low expectations.

Liquor: Valuation bottomed out in '24, and industry expectations are expected to bottom out in '25. Looking at the stage of the industry cycle, the bank judged that the first half of '25 was still in the liquidation period, and industry expectations may be bottomed out in the middle of the year. One of the two key indicators is Maotai's price expectations, and the other is the profit expectations of leading wine companies. At the level of price expectations, the industry is still in the inventory removal stage next year. However, considering the diversification of Maotai channels and the improvement of management capacity, and the 10-year composite quantitative measurement of indicators such as M2 and per capita disposable income from the bottom of the previous round, the bank determined that the bottom price of Pumao in this round should be around 2,000 yuan, and the pace is expected to set the bottom of the Q2 off-season after the Spring Festival. At the same time, it is recommended to focus on the price of old Maotai liquor, due to falling back first and lower inventory, it may be the first to see a steady rise. Metrics. At the level of profit expectations for wine companies, industry pressure was transmitted from outside the table to within the table in 24 years, but unloading the burden was a prerequisite for moving towards a new path. The decline in the profit sheet indicates that the liquor cycle is being adjusted later. The 25-year wine companies' goals will pragmatically decelerate, and with the transmission and gradual effects of macroeconomic policies, it is expected that profit expectations will not deteriorate after the 25H1 reduction is clear, leading to the bottom of profit expectations. Combined with the experience of the previous liquor cycle, valuations took the lead in reaching an inflection point in '14, industry expectations reached an inflection point in '15, and fundamentals (price and performance) accelerated in '16. Looking at the industry structure, the dominant power in various price bands and regions is still holding the bottom card, and confidence in profit targets is high, including Mao Wugu. Other wine companies are preparing new opportunities in the adjustment, and Laojiao and the strong brand Lifen Liquor, which have strong management capabilities, may take the lead in completing the adjustments.

Popular products: Dairy, condiments, and yeast have reached the right, and beer has come out of the bottom. The mass product dilemma reverses three stages: the first stage is clearing inventory and removing pressure on statements. Although demand is still under pressure, profit margins have improved; the second phase is waiting for demand to improve and revenue to accelerate; the third stage optimistically expects strong demand to drive supply shortages, rising upstream costs, and catalyzing downstream price increases. The industry pattern determines the speed of clean-up. Haitian and Angel Yeast, a leading condiment company, have already cleared up the cycle in the first half of the year. The dairy industry, which has a double strong pattern, accelerated clearance in the second quarter, and the improvement trend has been clear since the third quarter. Meanwhile, beer taps under the oligopoly pattern also increased sales and accelerated inventory digestion in the second half of the year, and are expected to enter 25 years with a low inventory base. In addition, B-side supply chain companies related to catering are not affected by the inventory cycle, and demand recovery is spreading rapidly. Quick-freezing and reconditioning companies are expected to experience reverse elasticity at a low base, while focusing on new Bairun whiskey products.

Investment advice: Cherish the definitive allocation window for leaders, and select varieties that reverse difficult situations with high elasticity. Currently, food and beverage investments are similarly allotted with “bullish options”: dividend rates provide a sufficient margin of safety, and macroeconomic stability consolidates the bottom. The profit margin comes from rising valuation in an environment of easy liquidity, and the other is from policy transmission to a recovery in demand. Leading companies with excellent long-term commercial attributes and outstanding competitiveness are currently in a rare definitive allocation window, and judging from the incremental capital structure of the market, the entry of ETF funds into the market will directly benefit Maowulufen, and weighted stocks such as Yili and Haitian. In terms of selecting specific targets:

Liquor: Definitely configure Maowugu, and prefer Laojiao Fenjiao in reverse elasticity. From the perspective of certainty about profit targets, Maotai and Wuliangye were the first to be promoted, and Gujing, which is expected to maintain double-digit growth in the coming year. From the perspective of reverse elasticity, we prefer old cellars, fenjiu, and current world relationships, and focus on rare wines.

Popular products: Embrace the dairy industry, beer and yeast, keep an eye on meal supply reversals and the elasticity of Bairun's new products. Combining the mid-level inventory cycle and the micro-operating cycle, the dairy industry is packaged and equipped with two leaders, Yili and Mengniu, focusing on the new dairy industry; beer bottoms strongly recommend leading brands, Tsing Beer and Huarun; the yeast leader Angel will bid farewell to the peak of growth and usher in a period of declining costs. The improvement trend is clear over the next 1-2 years. In addition, B-side meals provide flexible opportunities and prefer Polar, focusing on Ligao and Exquisite Flavors, and focusing on market feedback on new Bairun whiskey products. Continue to strategically recommend Dongpeng, Nongfu, Haitian, Yasui, etc., and focus on Zhongju and Xianle.

Risk warning: demand for terminals falls short of expectations, increased competition in the industry, etc.