Oriental Securities: The relative profit value of food and drink highlights suggestions to increase the allocation ratio of the consumer sector
The Zhitong Finance App learned that Orient Securities released a research report saying that the food and beverage sector currently has a good relative revenue allocation value. In terms of fundamentals, risks in the three-quarter report have been released centrally, and the bottom of sector performance has basically been established. As the low base effect gradually became apparent starting in 2026Q4, subsequent performance is expected to improve quarterly. In terms of transaction structure, the sector's overallocation ratio is at the second lowest level since 2003. The transaction structure is superior to other dividend assets, and there is more room for additional allocation. As policies to expand domestic demand and promote consumption continue to gain strength, it is recommended to increase the allocation weight of the consumer and domestic demand sectors, giving priority to high-dividend leaders, followed by individual stocks with poor expectations and small and medium-sized enterprises with reform logic, to specifically grasp the three main lines of dividend, main line of expected difference, and main line of industrial trends.
Orient Securities's main views are as follows:
Performance adjustments are sufficient, and the fundamental inflection point is getting closer
The 2026Q3 food and beverage sector achieved revenue of 233.1 billion yuan and net profit to mother of 38.2 billion yuan. Revenue and net profit to mother for the first three quarters were -1.2%/-8.1%, respectively. The Q3 adjustments increased, and industry risks were concentrated. Liquor was the first to show signs of improvement. The year-on-year decline in Q3 revenue and net profit declined by 7.1 pct and 8.5 pct compared to Q2, respectively, and Kweichow Moutai's Q3 revenue and net profit returned to positive growth; small and medium-sized enterprises adjusted earlier and took the lead in stabilizing. The Q3 revenue of enterprises with revenue of less than 3 billion yuan in 2025 was +2.8% year-on-year, and leading companies are in the relay clearance stage. According to the bank's judgment, the period with the biggest decline in sector performance has passed, the bottom of the performance has basically been established, and it is expected that it will be repaired quarterly in the future.
Structural highlights have emerged, and new channels, new categories, and new cycles have opened up room for growth
In terms of new channels, mass sales of snacks expanded rapidly, and channel changes continued to release increases; in terms of new categories, healthy and functional categories accelerated, segments such as electrolyte drinks, tea, cheese, and oats maintained rapid growth, and Yasui Foods and Zhongju Hi-Tech relied on product innovation and category expansion performance; on the cycle side, the average price of fresh milk changed year on year, and the raw milk cycle ushered in an inflection point. The profit repair of upstream ranches is certain, and demand for dairy products remains resilient.
Institutional allocation bottomed out and rebounded, and capital returned to core assets
In 2026Q3, the food and beverage overmix ratio was -1.02%, up 0.17pct from Q2; the actual liquor ratio increased from 1.06% to 1.55%; Kweichow Moutai increased its holdings by 0.25pct, ranking 5th in the consumer sector; the actual proportion of food and drink in Hong Kong stocks rebounded to 1.56%. After deducting Maotai, the actual allocation ratio for the sector was only 1.37%. The industry is still in a clearly underallocated range, and there is plenty of room for subsequent increases.
Investment recommendations and investment targets
Investment suggestions: Increase the weight of consumption allocation and prioritize domestic demand.
1) Main dividend line: recommend Kweichow Moutai (600519.SH, buy), Shanxi Fenjiu (600809.SH, buy), Yili shares (600887.SH, buy), Nongfu Spring (09633, buy);
2) Main line of expected difference: Recommended Dongpeng Drinks (605499.SH, purchase), Yanjing Beer (000729.SZ, purchase), New Dairy (002946.SZ, purchase), related targets Wanchen Group (300972.SZ, unrated), very busy (01768, unrated), Zhongju Hi-Tech (600872.SH, unrated);
3) Main industry trends: Recommended Youran Animal Husbandry (09858, purchase), Guyue Longshan (600059.SH, purchase), relevant targets Yasui Foods (603345.SH, unrated), Quanyangquan (600189.SH, unrated), Huifa Foods (, unrated), Seagra Foods (002956.SZ, unrated), H&H International Holdings (01112, unrated), Jin Dawei (002626.SZ, unrated). 603536.SH
Risk Alerts
Food safety issues, management changes, industrial policy adjustments, accelerated rise in raw material prices, poor recovery in consumer demand, etc.