Haitong Securities International·2025-07-02 13:11Investment Focus - The report maintains a cautious overall outlook while recommending selective stock picks in the essential consumer sector, highlighting companies such as Kweichow Moutai, Wuliangye, and Yili [1][6][9] Industry Overview - In June 2025, six out of eight tracked essential consumer sectors showed positive growth, with beer (+3.4%), soft drinks (+2.8%), condiments (+2.5%), dining (+2.4%), dairy (+1.6%), and frozen foods (+1.4%) experiencing growth. The sectors facing declines were low-end and mid-range liquor, with declines of -13.3% and -3.0% respectively [3][8][9] - The report notes that the new prohibition order and adverse weather conditions have significantly impacted essential consumer sectors, particularly dining and related products [3][6][9] Price Trends - In June, wholesale prices for liquor showed a downward trend, with Kweichow Moutai's prices dropping by 190 yuan for both whole and bottled products compared to the previous month. Other liquor brands also experienced price declines [4][21][23] Revenue Forecasts - The revenue for the high-end liquor sector in June was 296 billion yuan, down 3.0% year-on-year, while the low-end liquor sector generated 130 billion yuan, down 13.3% year-on-year. The overall revenue for the beer sector was 185 billion yuan, reflecting a 3.4% increase year-on-year [9][10][11] - The report predicts that the essential consumer sector will continue to face challenges in the upcoming months due to the ongoing effects of the prohibition order [6][9] Company Recommendations - The report suggests focusing on stocks with high dividends and improved fundamentals, specifically mentioning companies like China Feihe, Yili, Mengniu Dairy, and Wanzhou International as potential investment opportunities [6][9][19]