Shenwan Hongyuan Securities·2026-01-11 05:50Investment Rating - The report maintains a positive outlook on the liquor sector, with expectations for a recovery in sales and valuation improvements in 2026 [2][6]. Core Insights - The liquor market is undergoing a restructuring with a focus on balancing volume and price, and a potential turning point is anticipated in Q3 2026 [2][6]. - The report highlights the importance of consumer price index (CPI) as a key indicator for the consumer goods sector, predicting gradual improvements in food CPI throughout 2026 [2][6]. - The report recommends several high-quality liquor companies for long-term investment, including Kweichow Moutai, Luzhou Laojiao, and Shanxi Fenjiu, while also suggesting attention to Wuliangye and other brands [2][6]. Summary by Sections 1. Weekly Overview of Food and Beverage Sector - The food and beverage sector saw a 2.12% increase last week, with liquor stocks rising by 2.46%, although it underperformed the broader market by 1.70 percentage points [5]. - Notable stock performances included Ziyuan Food (+33.97%), Qianwei Central Kitchen (+22.52%), and Anji Food (+18.34%) [5]. 2. Market Performance of Food and Beverage Sub-sectors - The food and beverage industry lagged behind the Shenwan A index by 3.06 percentage points, with various sub-sectors underperforming, particularly beverages and dairy [33][34]. 3. Liquor Pricing Trends - As of January 10, 2026, the price of Moutai was reported at 1540 RMB for loose bottles, reflecting a week-on-week increase of 50 RMB, while the price for a case rose by 40 RMB to 1545 RMB [7][19]. - The report indicates that Moutai's pricing has found a bottom, reducing downward risks and suggesting a potential for price stability moving forward [7][19]. 4. Consumer Goods Sector Insights - The report emphasizes the shift in competitive strategies from price-based to quality-based approaches among consumer goods companies, with expectations for improved margins as raw material costs stabilize [2][6]. - Recommendations for consumer goods include Anjijia Food, Yili Group, and Tianwei Food, with a focus on the supply chain related to condiments and frozen foods [8]. 5. Dairy Industry Outlook - The dairy sector is expected to see an improved supply-demand balance in 2026, with growth potential in deep-processed products and low-temperature milk [8][9]. - Yili Group's projected net profits for 2025-2027 are 11.3 billion, 12.2 billion, and 12.9 billion RMB, respectively, indicating a growth trajectory [9].