Core Viewpoint - E Fund's report indicates a stable stock position in its largest fund, E Fund Blue Chip Selection, with adjustments in consumer and technology sectors, highlighting the attractiveness of undervalued stocks with substantial shareholder returns for long-term investors [1] Group 1: Fund Performance - E Fund Blue Chip Selection maintained a stable stock position in Q2, with adjustments made to the structure of consumer and technology sectors [1] - The fund continues to hold high-quality companies with excellent business models, clear industry patterns, and strong competitiveness [1] Group 2: Top Holdings - As of the end of Q2, the top ten holdings of E Fund Blue Chip Selection include Tencent Holdings, Wuliangye, Luzhou Laojiao, Kweichow Moutai, Shanxi Fenjiu, Alibaba-W, JD Health, Yum China, CNOOC, and SF Holding [1] - Compared to the end of Q1, JD Health and SF Holding entered the top ten holdings, while Yanghe Brewery and Meituan-W exited [1]

Investment Rating - The report maintains a "Recommended" investment rating for the food and beverage industry [5][8]. Core Views - The report highlights a shift from short-term explosive growth in instant retail to a more normalized layout, indicating a stabilization in the market dynamics [5][7]. - The white liquor sector is experiencing inventory adjustments, with companies taking measures to stabilize prices amid increasing industry pressures [5][6]. - The new consumption sector is expected to see a reduction in aggressive subsidy wars, but competition will remain a constant factor [7][8]. Summary by Sections Industry News - In June, the manufacturing value added of the liquor and tea industry grew by 3.4% year-on-year [17]. - The production of white liquor from January to June reached 1.916 million kiloliters [17]. - The China Chain Store and Franchise Association issued a statement against "involution" competition in instant retail [17]. Company News - Water井坊 reported a 13% decrease in total revenue for H1 2025, with a net profit drop of 57% [5]. - 酒鬼酒 expects a net profit of 0.08-0.12 billion yuan for H1 2025, down 90%-93% year-on-year [5]. - Guizhou Moutai launched its first live broadcast on Douyin for Moutai sauce-flavored liquor [17]. Investment Insights - The white liquor sector is seeing low valuations, with many companies engaging in stock buybacks and increasing dividends, indicating potential for future capital inflows [5]. - The mass consumer goods sector is facing profit pressure due to cost fluctuations, with companies like洽洽食品 and 甘源食品 reporting significant declines in net profits [6]. - The beverage sector is approaching peak season, with a focus on new consumption opportunities, particularly in tea and chain dining [8]. Key Company Focus and Earnings Forecast - The report emphasizes companies such as 泸州老窖, 古井贡酒, and 贵州茅台, all rated as "Buy" with projected earnings per share (EPS) growth [10][12]. - The beverage market is expected to benefit from changes in retail channels, with companies like 沪上阿姨 and 茶百道 highlighted for their growth strategies [8][10].

Group 1 - The report maintains an optimistic view on the market's ability to continue breaking through, driven by strong risk appetite and multiple signals supporting market upward momentum [8][9][10] - Key sectors showing strong performance include construction materials, non-bank financials, non-ferrous metals, agriculture, and household appliances, with high-growth sectors identified as media, agriculture, construction materials, transportation, and non-bank financials [9][10] - The report highlights the importance of the TMT sector, particularly AI hardware and gaming, as significant drivers of market interest and investment [8][9] Group 2 - The report emphasizes the potential of the low-altitude economy, with significant developments in eVTOL aircraft and related infrastructure, supported by government policies and local initiatives [53][54] - Companies like Xiaopeng Heavens and Times Technology are noted for their recent financing and order achievements, indicating strong market interest and growth potential in the low-altitude sector [53][54] - The report suggests that the low-altitude economy is experiencing a comprehensive rollout from macro to micro levels, with various applications being tested and developed [53][54] Group 3 - The food and beverage sector is facing challenges with slowing retail sales growth, particularly in the restaurant and alcohol segments, due to external factors such as subsidy controls and strict regulations [56] - Despite the pressures, there are opportunities for investment in leading liquor companies as valuations have reached low points, suggesting potential for recovery in the second half of the year [56] - The report indicates that the overall consumer demand needs to be stimulated, with a focus on the clearing of livestock and new demand drivers [56]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - Domestic demand still needs to be boosted, with a focus on the clearing of pastures and new demand momentum [3][4] - The food and beverage index increased by 0.7% from July 14 to July 18, ranking 13th among 28 sectors, underperforming the CSI 300 by approximately 0.4 percentage points [11][13] - In June 2025, the total retail sales of consumer goods increased by 4.8% year-on-year, with a month-on-month decline of 1.6 percentage points [3][11] - The restaurant and catering revenue in June 2025 showed a year-on-year increase of 0.9% and a decline of 0.4%, indicating significant pressure on restaurant consumption [3][11] Summary by Sections Market Performance - The food and beverage sector underperformed the market, with a 0.7% increase, ranking 13th among sectors [11][13] - Sub-sectors such as soft drinks (+2.0%), dairy products (+1.2%), and liquor (+0.9%) performed relatively well [11][13] Upstream Data - The price of whole milk powder in the GDT auction on July 15 was $3,928 per ton, a year-on-year increase of 25.0% [18][22] - The domestic fresh milk price was 3.0 yuan per kilogram, showing a year-on-year decline of 6.2% [18][22] Recommendations - Recommended companies include Guizhou Moutai, Shanxi Fenjiu, Ximai Food, Wancheng Group, and Bairun Shares [5] - Guizhou Moutai is expected to deepen its reform process and emphasize sustainable development despite short-term demand pressure [5] - Shanxi Fenjiu has high mid-term growth certainty, with product structure upgrades and accelerated national expansion [5]

Investment Rating - The industry rating is maintained as "Positive" [4] Core Views - The rotation between old and new consumption sectors continues, with leading brands in liquor and dairy products rebounding. The performance of mass-market products in Q2 shows divergence, with new consumption-related stocks experiencing rapid growth despite previous adjustments in performance expectations. Traditional channel reforms have impacted some stocks, leading to ongoing adjustments in performance [1][3][33] - The liquor sector is expected to have limited downside potential for leading companies, with high ROE, dividends, and cautious profit assumptions indicating a valuation floor. Recommended stocks include Guizhou Moutai, Shanxi Fenjiu, and Luzhou Laojiao [2][12] - New consumption trends are anticipated to continue, with potential for recovery in the second half of the year. Focus on low-priced or undervalued stocks with future catalysts, including Wei Long, Yili, and Wancheng Group [1][3][33] Summary by Sections Liquor Sector - The liquor sector remains at a low point, with a focus on potential policy catalysts and rebound opportunities. Leading brands with strong market positions are prioritized for investment. Recommended stocks include Guizhou Moutai, Wuliangye, and Shanxi Fenjiu [2][12] - Recent performance shows a positive trend, with Luzhou Laojiao, Yanghe, and Jiu Gui Jiu leading in gains, while Jinzhidao and Huangtai Jiuye faced declines [5][39] Mass-Market Products - The new consumption paradigm is reshaping the food and beverage investment landscape. Despite a recent pullback, the long-term trend remains positive, with clear opportunities for continued investment. Focus on stocks that align with new consumption trends, such as Wei Long, Yili, and Wancheng Group [3][33] - The mass-market sector has seen significant fluctuations, with stocks like Huangshi Group and Guoquan showing strong gains, while stocks like Ganyuan and Gu Ming faced notable declines [39][42] Performance Metrics - From July 14 to July 18, the Shanghai Composite Index rose by 1.09%, with non-dairy beverages and liquor sectors showing gains of 2.16% and 1.30%, respectively. Conversely, frozen foods and snacks experienced declines of 2.26% and 1.10% [39][40] - The valuation levels for the food and beverage industry have adjusted, with the liquor sector showing the highest valuation increase this week [43]

Investment Rating - The report maintains a positive outlook on traditional consumer head enterprises, indicating they have long-term investment value from a dividend and yield perspective [5] Core Viewpoints - The report highlights that the pressure on the liquor sector is expected to remain significant due to slow macro demand recovery and limited consumption scenarios, with key recommendations including Guizhou Moutai, Shanxi Fenjiu, and Luzhou Laojiao [5][6] - In the mass consumer goods sector, the report emphasizes the cost advantages supporting profitability and the growth potential driven by new products and channels, particularly in dairy and beer sectors [5][7] - The report identifies opportunities in the dairy sector due to supply-demand rebalancing and policy support, recommending companies like Yili and Qingdao Beer [5][7] Summary by Sections 1. Weekly Insights on Food and Beverage - The food and beverage sector saw a 0.68% increase last week, with liquor rising by 0.88%, underperforming the Shanghai Composite Index by 0.02 percentage points [4] - The report notes that the liquor sector is under pressure, with Moutai's bottle price stable at 1870 yuan and a slight decrease in bulk prices [6][26] 2. Market Performance of Food and Beverage Sectors - The report indicates that the food and beverage industry underperformed the Shenwan A index by 0.64 percentage points, with various sub-sectors showing mixed results [45] - The beverage and dairy sector outperformed the index by 0.14 percentage points, while other sectors like processed food and snacks lagged behind [45] 3. Liquor Sector Updates - Moutai's pricing remains stable, while other brands like Wuliangye and Guojiao 1573 experienced slight price declines [6][26] - The report mentions Moutai's plans to establish joint ventures in various provinces to enhance market order and collaboration [6] 4. Mass Consumer Goods Sector Insights - The retail sales of consumer goods reached 4.23 trillion yuan in June, with a year-on-year growth of 4.8%, but the beverage sector saw a decline of 4.4% [7] - The report highlights the growth potential in the snack and low-alcohol beverage segments driven by new retail formats and consumer trends [7]

Core Viewpoint - The total trading volume of the Shanghai and Shenzhen Stock Connect reached 194.62 billion, with Northern Rare Earth and Xinyi Technology leading in individual stock trading volume. The non-ferrous metals sector saw the highest net inflow of funds, while the electronic sector experienced significant outflows [1][4][5]. Trading Volume Summary - The total trading amount for the Shanghai Stock Connect was 92.08 billion, while the Shenzhen Stock Connect was 102.54 billion [1]. - The top traded stocks in the Shanghai Stock Connect included Northern Rare Earth (1st, 1.343 billion), Guizhou Moutai (2nd, 1.329 billion), and Shanxi Fenjiu (3rd, 1.107 billion) [2]. - In the Shenzhen Stock Connect, Xinyi Technology topped the list (1st, 2.367 billion), followed by Zhongji Xuchuang (2nd, 2.246 billion) and CATL (3rd, 1.791 billion) [3]. Sector Performance Summary - The non-ferrous metals sector led with a net inflow of 3.873 billion, followed by small metals (0.806 billion) and diversified finance (0.798 billion) [4]. - The electronic sector had the highest net outflow of 8.962 billion, followed by the computer sector (5.595 billion) and transportation equipment (3.374 billion) [5]. Individual Stock Fund Flow Summary - The top stocks with net inflows included Northern Rare Earth (2.028 billion), Zhongyou Capital (1.047 billion), and Wanhua Chemical (0.660 billion) [6]. - The stocks with the highest net outflows were Changshan Beiming (-1.307 billion), Shengzuo Technology (-1.094 billion), and Hengbao Co., Ltd. (-0.736 billion) [7]. ETF Trading Summary - The top ETF by trading volume was the Hong Kong Securities ETF (1.397 billion), followed by the Hong Kong Innovative Drug ETF (0.877 billion) [8]. - The ETF with the highest growth in trading volume was the Wine ETF (1.10189 billion, up 141.46%), followed by the Rare Earth ETF (0.33435 billion, up 113%) [9]. Futures Position Summary - In the futures market, the IH contract saw a net increase in long positions of 3,760 contracts, while the IF contract had an increase of 2,660 contracts [10]. Institutional Activity Summary - Institutional buying was notable in Northern Rare Earth (0.5423 billion) and Lisheng Pharmaceutical (0.630 billion) [11]. - Significant selling was observed in Spring Wind Power (-2.77 billion) and Mankun Technology (-0.5819 billion) [12]. Retail and Quantitative Activity Summary - Retail investors showed increased activity, with notable buying in Maigemi Te (over 2.4 billion) and selling in Hengbao Co., Ltd. (-1.16 billion) [14][15].

Market Performance - The Shanghai and Shenzhen 300 Index increased by 1.09%, while the Shenwan Food and Beverage Index rose by 0.87% during the week of July 14-18, 2025 [1] - The top five performing stocks in the food and beverage sector were Huangshi Group, Baihe Co., Huashanghuan, Luzhou Laojiao, and Zhuangyuan Pasture [1] Institutional Insights - Tianfeng Securities recommends focusing on leading liquor companies benefiting from concentration increases, such as Shanxi Fenjiu and Kweichow Moutai [2] - The firm also highlights strong consumer goods companies that align with cost reduction and market share growth strategies, suggesting stocks like Lihai Food and Ximai Food [2] - Guosheng Securities anticipates pressure on the liquor sector in the first half of the year, advising attention to leading brands and high-certainty regional wines [3] Macro Events - The National Consumer Goods Industry Conference emphasized measures to boost consumption and expand domestic demand, focusing on strategic planning for the consumer goods industry [4] - The conference highlighted the importance of technological innovation and the integration of digital solutions across various sectors, including food and beverage [4] Agricultural Supply - The Ministry of Agriculture reported sufficient supply of "vegetable basket" products, with meat production reaching 48.43 million tons in the first half of the year, a 2.8% increase year-on-year [5][7] - Milk production was 1.864 million tons, reflecting a 0.5% growth, while the overall agricultural value added increased by 3.7% [6][7] Industry News - The import of liquor saw a significant increase of 47.3% in the first five months of 2025, primarily driven by the return of white liquor, despite an overall decline in liquor imports [8] - The white liquor sector is experiencing a rational return, with second-tier brands facing challenges and price compression [9] - The RTD (Ready-to-Drink) segment is projected to grow, contrasting with the decline in traditional liquor categories [10] Company Developments - The light bottle liquor market is expanding, with expectations to reach approximately 150 billion yuan by 2024, as consumers seek cost-effective options [11] - McDonald's China reported over 90% of its supply chain sourced locally, with plans to open 1,000 new restaurants this year [13]

Market Overview - The FTSE China A50 Index components showed strong performance in sectors such as banking, insurance, and liquor, while the consumer electronics sector underperformed [1][6]. Banking Sector - Everbright Bank had a market capitalization of 254.068 billion with a trading volume of 609 million, closing at 4.30, up by 0.03 (+0.70%) [3]. Insurance Sector - China Ping An and China Life Insurance had market capitalizations of 1,039.258 billion and 356.818 billion respectively, with trading volumes of 24.93 billion and 6.12 billion. Their stock prices increased by 0.42 (+1.15%) and 0.03 (+0.36%) [3]. Liquor Industry - Kweichow Moutai, Shanxi Fenjiu, and Wuliangye had market capitalizations of 1,805.156 billion, 220.936 billion, and 480.465 billion respectively. Their trading volumes were 59.85 billion, 25.98 billion, and 30.62 billion, with stock price increases of 5.03 (+2.86%), 20.65 (+1.46%), and 1.13 (+0.92%) [3]. Semiconductor Sector - Northern Huachuang, Cambricon Technologies, and Hygon had market capitalizations of 234.658 billion, 243.739 billion, and 318.365 billion respectively. Their trading volumes were 26.40 billion, 29.85 billion, and 16.55 billion, with stock price changes of +6.59 (+2.07%), -1.03 (-0.75%), and +0.22 (+0.04%) [3]. Oil Industry - Sinopec and PetroChina had market capitalizations of 271.538 billion and 705.647 billion respectively, with trading volumes of 8.53 billion and 6.48 billion. Their stock prices increased by 0.09 (+1.57%) and remained unchanged [3]. Coal Industry - China Shenhua and Shaanxi Coal and Chemical Industry had market capitalizations of 743.083 billion and 185.562 billion respectively, with trading volumes of 7.78 billion and 9.61 billion, with stock price increases of 0.27 (+0.73%) and 0.17 (+0.90%) [3]. Automotive Sector - BYD had a market capitalization of 1,808.349 billion with a trading volume of 44.82 billion, closing at 329.11, up by 1.09 (+0.33%) [3]. Shipping and Port Sector - No specific data provided for this sector in the document [4]. Power Industry - No specific data provided for this sector in the document [4]. Securities Sector - CITIC Securities had a market capitalization of 420.014 billion with a trading volume of 18.87 billion, closing at 28.34, up by 0.09 (+0.32%) [4]. Battery Sector - CATL had a market capitalization of 1,236.485 billion with a trading volume of 59.82 billion, closing at 271.20, up by 5.70 (+2.15%) [4]. Consumer Electronics - Industrial Fulian and Luxshare Precision had market capitalizations of 538.390 billion and 280.871 billion respectively, with trading volumes of 35.27 billion and 53.15 billion, with stock price decreases of -0.39 (-1.42%) and -0.67 (-1.70%) [4]. Home Appliances - Haidilao and Gree Electric Appliances had market capitalizations of 268.195 billion and 241.985 billion respectively, with trading volumes of 10.06 billion and 8.44 billion, with stock price changes of +0.32 (+0.67%) and -0.02 (-0.08%) [4]. Chemical and Pharmaceutical Sector - Hengrui Medicine had a market capitalization of 251.506 billion with a trading volume of 38.81 billion, closing at 47.71, up by 1.35 (+2.91%) [4]. Logistics Sector - SF Holding had a market capitalization of 241.541 billion with a trading volume of 11.63 billion, closing at 46.04, up by 0.76 (+1.68%) [4]. Non-ferrous Metals - Mindray Medical had a market capitalization of 273.187 billion with a trading volume of 25.08 billion, closing at 225.32, up by 8.14 (+3.75%) [4].

Group 1 - The food and beverage sector is performing well, with leading liquor stocks showing significant gains, such as Luzhou Laojiao rising over 3% and Yanghe Co. increasing over 2% [1] - The Food ETF (515710) reached a maximum intraday price increase of 1.16%, closing up 0.83% [1][3] - A report from Brand Finance revealed that six Chinese liquor brands made it to the top ten of the world's most valuable liquor brands, with Moutai, Wuliangye, Luzhou Laojiao, and Fenjiu ranking among the top four [1] Group 2 - The current valuation of the food and beverage sector is favorable, with the food ETF's price-to-earnings ratio at 20.01, which is at a low point compared to the past decade [3] - The food and beverage sector is expected to see improved demand as national economic stimulus policies take effect, leading to a potential recovery in the sector's overall performance [4] - By 2025, revenue growth for food and beverage listed companies is anticipated to remain in single digits, slightly above the industry average, with a friendly cost environment supporting profit margins [4][5] Group 3 - The Food ETF (515710) tracks the CSI segmented food and beverage industry theme index, with approximately 60% of its holdings in high-end and mid-range liquor stocks [5] - The top ten weighted stocks in the ETF include leading brands such as Moutai, Wuliangye, Luzhou Laojiao, and Yili [5]