Investment Rating - The report maintains a "Buy" rating for the food and beverage sector, indicating an expected investment return exceeding 15% over the next 6-12 months [5][33]. Core Insights - The restaurant industry is expected to gradually recover, with a slow recovery trend observed in Q1 2025 compared to the entire year of 2024, as indicated by an increase in store numbers and market heat [1][13]. - The first quarter of 2025 saw a slight decline in restaurant market sentiment compared to the previous quarter, likely influenced by the Spring Festival holiday, but remains in a recovery phase compared to the full year of 2024 [1][13]. - The report highlights a significant increase in restaurant store numbers in first-tier cities, with a 3.6% increase from Q4 2024 to Q1 2025, driven by the issuance of dining vouchers [2][16]. - The trend towards affordable dining continues, with restaurants priced under 50 yuan per person accounting for 70% of the total store count as of Q1 2025, reflecting a shift towards low-cost, high-value dining options [3][26]. Summary by Sections Restaurant Industry Recovery - Q1 2025 shows a slow recovery in the restaurant market, with a 1.8% increase in store numbers compared to Q4 2024, despite a competitive environment [1][13]. - The overall restaurant income growth rate has improved, with March 2025 showing a year-on-year increase of 5.6% in total retail dining income [1][13]. First-tier City Performance - First-tier cities have seen an increase in restaurant heat since Q4 2024, with a 3.6% increase in store numbers in Q1 2025, aided by government policies [2][16]. - The report notes a mixed performance in second and third-tier cities, with store numbers remaining relatively stable [2][16]. Consumer Trends - The report emphasizes the continued expansion of low-cost dining options, with a notable increase in stores priced under 50 yuan, while mid-range dining options have seen a slight decline [3][26]. - The opening rates for affordable dining categories such as noodle shops and snacks remain high, indicating strong consumer demand for budget-friendly options [2][21]. Investment Recommendations - The report suggests focusing on upstream supply chain-related companies, highlighting specific firms such as Lihigh Food, which reported a 14% year-on-year revenue growth in Q1 2025 [4][31]. - Other recommended companies include Anjii Food and Qianwei Central Kitchen, both of which are adapting to market conditions and focusing on product innovation [4][31].