Multiple positive signals resonate! Food and beverage sector strengthens, bullish outlook for 2026?

The food and beverage sector performed strongly in the morning trading session on February 5, with Haixin Food and Anji Food hitting the daily limit; Hongmian Shares, Tianwei Food, Qianhe Weiye, Happy Family, and others also showed significant gains.

Many favorable policies announced

From a comprehensive market perspective, the strength of the food and beverage sector is partly related to the upcoming Spring Festival holiday and partly due to the introduction of policies to stimulate consumption.

Recent research reports from Kaiyuan Securities state that the Spring Festival is the peak season for food and beverage consumption, with gift purchases, family reunions, and other scenarios driving a concentrated release of consumer demand for mainstream products.

On the policy front, the Ministry of Commerce, the Ministry of Culture and Tourism, and other departments jointly issued the “2026 ‘LeGou Spring Festival’ Special Activities Plan for the Spring Festival,” which mentions organizing diverse and popular Spring Festival consumption promotion activities through integrated business, tourism, culture, and sports, as well as online and offline coordination. The plan aims to expand the supply of quality goods and services, enrich diverse consumption scenarios, and stimulate the vitality of physical commerce.

Additionally, the General Office of the State Council issued the “Work Plan for Accelerating the Cultivation of New Growth Points in Service Consumption,” focusing on releasing the potential of service consumption and injecting strong policy expectations into large consumer sectors like food and beverages.

Sector valuation at a historic low

The valuation of the food and beverage sector is at a relatively low level historically. Based on this, Kaiyuan Securities believes that the sector’s safety margin is quite prominent.

Data from Eastmoney Choice shows that the latest PE (TTM) for the food and beverage sector is 21.45 times, with a percentile of 12.87% since data collection began, meaning the current valuation is only higher than 12.87% of trading days in history.

Performance improvement expectations?

Looking at performance, over the past five years (2021-2025), the overall performance of the food and beverage sector has been under pressure. In the most recent four quarters, the Q4 2024 performance declined by 12.88% year-over-year, Q1 2025 saw a slight increase of 0.28%, Q2 2025 declined by 2.09%, and Q3 2025 declined by 14.6%.

Based on the currently disclosed performance forecasts for 2025, out of 60 food and beverage stocks, only 14 have positive earnings expectations, with an optimistic rate of about 23%. Conversely, 17 stocks are expected to see earnings reductions, and 11 stocks are expected to report first-time losses.

Chengtong Securities states that with policy support and a recovery in consumer confidence, the food and beverage sector is expected to stabilize and may see room for earnings recovery.

Is 2026 optimistic for food and beverages?

Guoxin Securities believes that the overall outlook for the food and beverage sector in 2026 is optimistic, recommending focus on four main lines: profit improvements driven by cost advantages in dairy, yeast, and other industries; market share expansion of efficiency-enhancing companies; companies with new product development and channel innovation capabilities; and distressed turnaround opportunities in white wine and other segments with valuation repair potential after adjustments.

Donghai Securities also remains optimistic about food and beverages, believing that under the expansion of domestic demand policies, consumption potential continues to be released, channel reforms are leading new demand, and industry structural opportunities should be watched. The directions for turnaround include: (1) catering supply chain: CPI stabilizing and rebounding, catering demand expected to marginally recover, leading companies facing less competition; (2) dairy industry: temporary anti-subsidy measures on EU imported dairy products, and measures such as “country quotas and additional tariffs” on imported beef, suggesting a resonance in the meat and dairy cycle in 2026.

For new consumption trends, attention is on sectors like snacks, tea drinks, and pet products under the trends of self-indulgence, health, and value-for-money.

Some institutions, while optimistic, also express caution. Guohai Securities states that the main risks facing current consumption are twofold: first, macroeconomic growth falling short of expectations, which significantly impacts consumption; if economic growth underperforms, it will affect corporate operations and residents’ income levels, ultimately weakening consumption power; second, increased competition: in the context of a weak recovery, consumers are more focused on value-for-money, and fierce market competition may impact performance if companies cannot keep up with market trends and meet changing customer needs.

(Source: Eastmoney Research Center)