Investment Rating - The report rates the food and beverage industry as "stronger than the market" [2][5]. Core Insights - The food and beverage sector experienced a decline of 2.17% in the week of July 28 to August 1, underperforming the Shanghai Composite Index, which fell by 0.94% [8]. - The industry is currently at a historical low valuation, with a PE-TTM of 20.95x, placing it in the 16th percentile over the past 15 years [15][19]. - The introduction of the "Childcare Subsidy Policy" is expected to benefit the dairy sector, particularly infant formula, by stimulating consumption among over 20 million families [31]. - The white liquor segment is showing signs of bottoming out, with high-end light bottle liquor expected to be a growth area due to its strong repurchase rate and stable profit margins [26][24]. - The soft drink sector is entering a peak season, with a projected continuation of high growth due to new product launches and a favorable market environment [33]. Summary by Sections 1. Industry Performance - The food and beverage industry index fell by 2.17%, ranking 17th among 31 sub-industries [8]. - The sub-sectors with the least to most decline include: meat products (-0.03%), dairy products (-0.55%), health products (-1.11%), and soft drinks (-4.28%) [10][12]. 2. White Liquor - The white liquor industry is in a phase of stabilization, with high-end light bottle liquor showing strong growth potential [23]. - The anticipated investment of 1.2 trillion yuan in the Yajiang hydropower project is expected to stimulate long-term consumption in the white liquor sector [24]. - Major brands are increasing dividends, with the overall dividend yield in the white liquor sector exceeding 4% [3]. 3. Dairy Products - The newly implemented childcare subsidy policy is projected to directly boost dairy product consumption, especially infant formula [31]. - Companies like Beingmate and Sunshine Dairy have seen significant stock price increases following the announcement of the subsidy [4]. 4. Soft Drinks - The beverage industry has shown strong performance, with a 3.2% year-on-year increase in production in June 2025 [32]. - The sector is expected to maintain high growth due to the introduction of new products and the ongoing peak season [33]. 5. Cost Indicators - Sugar prices remained stable, while prices for soybeans, corrugated paper, and glass saw slight increases [36].