Investment Rating - The report maintains a "Buy" rating for the food and beverage sector [5] Core Viewpoints - The food and beverage sector has shown significant growth, with the CITIC Food and Beverage Index rising by 6.24%, ranking first among CITIC's primary industries, driven by expectations of consumption policy boosts and new birth subsidies [11][12] - Although the reversal point for the food and beverage sector has not yet been confirmed, stable fundamentals, a low base period starting in Q2, and favorable policies are expected to sustain market sentiment and drive valuation recovery [11][12] Summary by Relevant Sections 1. Key Company Updates - **Baijiu**: Luzhou Laojiao's market performance is strong, with inventory continuing to decrease. The company has seen positive feedback in its southwestern market, benefiting from relaxed payment requirements and competitor stockouts, leading to a safe inventory level [11][12] - **Frozen Food**: Anjiu Foods announced a 444.5 million yuan acquisition of 70% of Dingwei Thai, which is expected to enhance synergy in channels, products, and exports. Dingwei Thai's high-end frozen products complement Anjiu's offerings and target premium retail channels [12] - **Dairy Products**: Yili's operations are stable post-holiday, with positive growth in white milk and reduced sales declines in ambient yogurt and dairy beverages. The inventory cycle has improved compared to last year, and promotional pressures have decreased, indicating a favorable competitive environment [13] 2. Investment Recommendations - The report suggests maintaining positions in dairy and snack sectors, recommending Yili and Yan Jin Pu Zi as core holdings. It also advises flexible trading in underperforming sectors with potential for recovery, such as Lihai Foods and Shede Liquor [45] - In the baijiu sector, the focus remains on companies with better competitive positioning during the industry downturn, recommending Guizhou Moutai, Wuliangye, and Shanxi Fenjiu [45] 3. Key Data Tracking - As of March 14, 2025, the food and beverage sector's valuation (PE TTM, excluding negative values) is at 22 times, up approximately 7.3% since the beginning of the year. The CITIC Baijiu Index PE is at 21 times, up about 10.4% [14]