Haitong Securities International·2025-06-04 11:20Investment Focus - The report emphasizes the strategy of investing in stocks with high dividends and improved fundamentals, particularly in the essential consumer sector [1][6] - Key stocks recommended for investment include Kweichow Moutai, Wuliangye, and Yili, all rated as "Outperform" [1] Industry Overview - In May 2025, six out of eight tracked industries maintained positive growth, with the restaurant sector growing by 3.7%, beer by 3.3%, and soft drinks by 3.1% [3][8] - The industries experiencing negative growth include mass-market and above mid-range liquor, with declines of 13.0% and 2.5% respectively [3][8] Price Trends - In May, the price of Moutai continued to decline, while high-end products like Wuliangye stabilized [4] - The overall price trend in the liquor market showed more declines than increases, particularly in the mid-range segment [4][10] Cost Analysis - The cost index for soft drinks, seasonings, and other categories showed slight increases, while beer and instant noodles experienced declines [4] - Packaging material prices have decreased significantly compared to last year, with aluminum can prices up by 12.01% [4] Fund Flows - As of the end of May, net inflows into Hong Kong Stock Connect amounted to 41.99 billion yuan, with the essential consumer sector's market capitalization share at 5.65% [5] - The food additives sector saw an increase in market share, while the dairy sector experienced a slight decrease [5] Valuation Metrics - The PE historical percentile for A-share food and beverage stocks was 19% (21.5x), a decrease from the previous month [5] - H-share essential consumer sector PE historical percentile increased to 34% (18.8x), reflecting a rise in valuation [5] Recommendations - The report suggests waiting for opportunities or buying high-dividend stocks, as the current fundamentals lack catalysts for growth [6] - Key stocks with high dividend yields include Master Kong, Uni-President, and China Feihe, among others [6]