China Galaxy Securities: Weak recovery in the food and beverage industry during National Day and Mid-Autumn Festival, focus on third-quarter report performance

According to the China Galaxy Securities research report, as reported by the liquor industry, the overall sales of liquor during the Mid-Autumn Festival and National Day holidays have declined by 20%-30%, showing characteristics of differentiation by scene, region, and brand. In terms of scenes, demand for business banquets remains sluggish, while mass consumption and gatherings are relatively strong. In the restaurant sector, travel during the National Day holiday has steadily increased. According to preliminary statistics from the Ministry of Transport, from October 1 to 8, the total inter-regional movement of people reached approximately 2.432 billion, with an average of 304 million per day, a year-on-year increase of 6.2%, setting a historical high for the same period, leading to a marginal weak recovery. Looking ahead to October, the market will focus on the third-quarter earnings reports, with attention on related high-performing stocks and sectors.

The main points from China Galaxy Securities are as follows:

Slight improvement in September, weak recovery during National Day and Mid-Autumn Festival

Liquor industry: According to the liquor industry, the overall sales of liquor during the Mid-Autumn Festival and National Day holidays have declined by 20%-30%, showing characteristics of differentiation by scene, region, and brand. In terms of scenes, demand for business banquets remains sluggish, while mass consumption and gatherings are relatively strong. By region, traditional liquor consumption provinces such as Henan, Shandong, and Jiangsu are relatively stable. By brand, demand for top-name liquors is recovering, and inventory has decreased after destocking in the first half of the year. For example, in the case of Moutai, market research in 16 provinces shows that since September, the terminal sales of Guizhou Moutai liquor have increased by about 100% month-on-month and over 20% year-on-year, further boosting from August.

Restaurant supply chain industry: Nine departments, including the Ministry of Commerce, issued "Several Policy Measures to Expand Service Consumption," which is expected to boost consumer confidence. In September, Gaode Map released the "Gaode Street Scanning List" and launched the "Support Plan for Good Offline Stores," aiming to add an average of 10 million customers daily to offline dining and other service industries. Travel during the National Day holiday has steadily increased, with preliminary statistics from the Ministry of Transport indicating that from October 1 to 8, the total inter-regional movement of people reached approximately 2.432 billion, with an average of 304 million per day, a year-on-year increase of 6.2%, setting a historical high for the same period, leading to a marginal weak recovery.

Data tracking: Liquor wholesale prices under pressure, raw material costs differentiated

Liquor wholesale prices: In September, the wholesale price for Feitian whole boxes and loose bottles was 1790/1765 yuan, down 40/40 yuan from last month and down 600/530 yuan from the same period last year; the wholesale price for Baijiu 8th generation was 840 yuan, down 20 yuan from last month and down 120 yuan from the same period last year; the wholesale price for Guojiao 1573 was 840 yuan, up 10 yuan from last month and down 20 yuan from the same period last year; the wholesale price for Qinghua 20 was 360 yuan, unchanged from last month and down 15 yuan from the same period last year; the wholesale price for Dream Blue M6+ was 540 yuan, unchanged from last month and down 10 yuan from the same period last year.

Packaging materials: As of September 24, 2025, the prices of PET/packaging film are down 7.1%/-4.8% year-on-year, while the prices of aluminum/glass/cardboard boxes are up 3.2%/+2.6%/+8.0% year-on-year.

Raw material costs: The prices of white sugar/flour/quail eggs/pork are down 8.8%/-2.7%/-2.1%/-26.5% year-on-year; the prices of soybeans/palm oil/sunflower seeds are up 0.3%/+7.0%/+9.4% year-on-year. In August 2025, the import price of barley was up 4.2% year-on-year Dairy products, on September 18, the domestic fresh milk price was 3.03 yuan/kg, down 3.5% year-on-year; the winning bid price for whole milk powder at the GDT auction was USD 3,790/ton, up 9.9% year-on-year.

Investment Suggestions

In September, the food and beverage index performed relatively weakly compared to the broader market, with all sub-sectors undergoing adjustments. Looking ahead to October, the market will focus on third-quarter earnings reports, and related high-performing stocks and sectors can be closely monitored. Looking ahead to Q4 2025, under the expectation of gradual transmission of PPI improvement to CPI improvement, priority should be given to cyclical directions with supply clearing and valuation bottoms. In the medium to long term, it is recommended to focus on three main lines:

1) Growth stocks in new categories and new channels, such as Guoquan (02517), Wancheng Group (300972.SZ), Dongpeng Beverage (605499.SH), Weilong Delicious (09985), Yanjin Puzhi (002847.SZ), Jinzai Food (003000.SZ), YouYou Foods (603697.SH), and Lihai Food (300973.SZ).

2) Sectors with relatively stable demand and improved competitive landscape, including Nongfu Spring (09633), Uni-President China (00220), China Resources Beverage (02460), and Master Kong Holdings (00322).

3) Cyclical recovery direction, in the liquor sector focus on Moutai (600519.SH), Shanxi Fenjiu (600809.SH), Wuliangye (000858.SZ), and LZLJ (000568.SZ); in the consumer goods sector focus on Tsingtao Brewery (600600.SH), Yanjing Brewery (000729.SZ), Chongqing Brewery (600132.SH), China Resources Beer (00291), Qianwei Central Kitchen (001215.SZ), and Baoli Food (603170.SH).

Risk Warning

Risks of demand recovery falling short of expectations, risks of intensified industry competition, risks of downstream channel transformation effects falling short of expectations, and food safety risks