Is it time to layout for a reversal in the consumer sector?

China Merchants Securities' latest research report points out that despite the uncertainty in the macro environment and the deep adjustment phase of the consumer sector, leading companies are showing structural resilience, with several sub-sectors already displaying positive signals. Specifically, high-end liquor sales have exceeded expectations, with benchmark brands' prices rising to confirm bottom support; the penetration rate of bulk snacks is accelerating, and leading companies are continuously increasing their market share; the innovative drug industry chain is trending positively, with the CXO sector gradually entering a recovery phase; and the livestock industry's capacity reduction continues, with marginal improvements in supply and demand relationships. The current consumer sector is in a window for emotional and valuation recovery, with increasing industry concentration becoming a certain main line. In summary, the investment logic of the current consumer sector has shifted from Beta-driven to Alpha-exploration. It is recommended to focus on leading companies with scale barriers, brand influence, and operational efficiency advantages to seize structural layout opportunities. Liquor: Moutai's price bottom confirmed, trend of concentration among leading brands continues The report states that according to the latest channel research, the overall sales of the liquor industry are still showing a double-digit decline trend, but the performance of Moutai has significantly exceeded market expectations. Feedback from major markets such as Henan, Anhui, and Sichuan indicates that the demand for stocking up for the Spring Festival has been significantly advanced, with many regions recording double-digit growth in sales, which is significantly better than the previously cautious market expectation of flat performance. Among them, the iMoutai platform contributed over 1,500 tons of incremental sales in January, and the pricing strategy of 1,499 yuan effectively activated mass consumption, with the related demand proportion rising from single digits to over 20%. From the supply and demand structure perspective, Moutai's traditional channel shipment progress has reached 25%, which is on par with the same period last year, while channel inventory levels are at historical lows. In a tight supply situation, the wholesale price has steadily risen to nearly 1,700 yuan, confirming the price bottom. In the short term, the quotas before the Spring Festival have basically been executed, and dealer inventories are at extremely low levels, with a tight balance between supply and demand expected to support strong price performance. In the medium term, the trend of increasing industry concentration continues, and some brands that adjusted their channels earlier are expected to achieve year-on-year growth from a low base. However, the pattern of strong companies becoming stronger remains solid. In the long term, despite the current industry facing macroeconomic pressures and policy environment impacts, the supply and demand structure of leading liquor companies is solid. As the relevant constraints gradually ease, there is hope for a synchronous recovery in performance and valuation. Bulk Snacks: Efficient business models rapidly increasing market share The bulk snack channel, with its comprehensive value of "variety, speed, quality, and cost-effectiveness," is rapidly achieving structural replacement of traditional retail formats. Data shows that by 2024, the market size of this industry has surpassed 129.7 billion yuan, with a compound annual growth rate of 77.9% from 2019 to 2024. In the long term, the industry is expected to reach a store scale of 80,000 to 100,000, with the current penetration rate at only about 20%, indicating vast future development space. The market pattern shows a trend of high concentration. The combined market share of the two leading companies, "Mingming Hen Mang" and "Wancheng," has exceeded 75%, with "Mingming Hen Mang" accounting for about 43%. Leading companies have established significant competitive barriers through deep supply chain integration, efficient warehousing and distribution systems, and rapid store expansion capabilities: continuous optimization of category structure, increased direct supply and customization ratios, and improved quality control systems. By the end of November 2025, the total number of "Mingming Hen Mang" stores has reached 21,041, achieving a GMV of 66.1 billion yuan in the first three quarters, a year-on-year increase of 73% The adjusted net profit reached 1.81 billion yuan, with a year-on-year growth rate of 241%. Against the backdrop of the continued trend of cost-effective consumption, the bulk snack channel is expected to continuously enhance market penetration due to its outstanding operational efficiency. As the scale effect is further released, leading enterprises will continuously strengthen their advantages in supply chain, branding, and operations, and the industry concentration is expected to further increase. Head enterprises with systematic capabilities will continue to benefit from industry growth and integration dividends. Pharmaceuticals: Clear Mainline for Innovative Drugs, Upward Trend in the Industry Chain The report points out that against the backdrop of accelerated overseas innovation and continuous differentiation in domestic demand structure, investment opportunities in the pharmaceutical sector are increasingly showing structural characteristics. The innovative drug industry chain remains the core mainline, with popular tracks including immunotherapy iterations, weight-loss drugs, and ADCs, while small nucleic acid technology is becoming a breakthrough direction worth focusing on. This technology has expanded from rare diseases to chronic diseases, with target ranges extending from intrahepatic to extrahepatic. The year 2026 is expected to be a key catalytic year for the small nucleic acid industry, with several related companies entering the listing stage, and traditional pharmaceutical companies actively laying out through cooperation and self-research platforms. In the upstream of the industry chain, the CXO sector is steadily recovering. Since 2025, the improvement in the overseas biotechnology investment and financing environment has gradually fulfilled external demand orders, and continuous innovation in molecular types has brought new growth opportunities to the industry chain; domestic CRO demand has shown structural recovery, with new signed orders maintaining a growth trend. The life sciences service sector has benefited from the recovery of domestic R&D investment, generally welcoming a performance inflection point. The price of the raw material pharmaceutical industry has entered a bottom range, and as new production capacity is gradually released, companies with stable customer structures and order support are expected to achieve marginal profit improvement through enhanced capacity utilization. The medical device sector can focus on the inventory cycle improvement brought by the recovery of hospital demand. The bidding data for medical equipment continues to improve, which is expected to promote the gradual optimization of channel inventory, and the industry may welcome a turning point in prosperity in 2026. The scope of bulk procurement for high-value consumables continues to expand, accelerating the process of domestic substitution. In the IVD field, driven by centralized procurement policies, leading domestic companies are expected to further increase their market share. Home and Textiles: Marginal Improvement in Real Estate Chain Sentiment Since the beginning of 2026, positive signals have emerged in the real estate market, with a warming trend in second-hand housing transactions. In the second to fourth weeks of January, the transaction area of second-hand houses in key cities increased by 29%, 5%, and 5% respectively compared to the previous month, with the cumulative year-on-year decline narrowing to -2%, reflecting that market expectations and supply-demand structures are synchronously recovering. On the policy front, restrictions related to corporate financing are expected to be moderately adjusted, and Vanke's debt extension is progressing smoothly, leading to a marginal improvement in overall sentiment in the real estate industry chain. The home furnishing sector is currently in a dual recovery window of valuation and sentiment. Leading companies are valued at historical lows, combining the safety margin brought by high dividends with structural advantages of continuously increasing market share. Leading companies in the soft and custom home furnishing sectors are expected to benefit from both the industry beta recovery and the release of their own alpha capabilities. In the sportswear industry, Li Ning is advancing reforms in multiple dimensions of products, channels, and marketing. In terms of products, the market attention for the Feidian 6 series and Chitu 9 series equipped with super technology has significantly increased; In terms of channels, the first "Dragon Store" in Sanlitun, Beijing has opened, further enriching the product matrix of the Honor Gold Standard series; in terms of marketing, the brand made an appearance at Milan Fashion Week to lay the groundwork for the February Milan Winter Olympics. Against the backdrop of gradual operational adjustments and a relatively low base in the same period, the company's performance in 2026 is expected to welcome a recovery opportunity. Animal Husbandry: Capacity Reduction Continues, Supply and Demand Improvement Expected The trend of capacity reduction in the pig farming industry continues. Since May 2025, multiple regulatory policies have been gradually implemented, promoting orderly adjustments in industry capacity. By the end of 2025, the national breeding sow inventory had dropped to 39.61 million heads. Considering the number of new piglets in the second half of 2025, pig supply in the first half of 2026 will still be at a relatively high level, and pig prices may continue to be under pressure. However, as the process of reducing breeding sows is expected to accelerate, the turning point of the industry cycle is approaching. Recently, supported by the peak consumption season, pig prices have shown a slight recovery, and leading breeding enterprises with cost advantages and financial strength are gradually revealing their investment value. In the poultry farming sector, the white feather chicken industry has been affected by the previous contraction in overseas breeding imports and a decline in the quality of breeding chickens, leading to a continued tight supply of parent stock. The yellow feather chicken sector has entered an upward phase since the fourth quarter of 2025, with current farming costs at historical lows, and the profitability of quality enterprises is gradually being released. The planting sector benefits from the cyclical rotation of agricultural products and policy drivers. Against the backdrop of increasing extreme weather and uncertainty in the trade environment, the strategic position of food security has been elevated, and the domestic industrialization process of genetically modified corn is accelerating, which is expected to promote the expansion of the seed industry market and optimize the competitive landscape. Leading seed companies with continuous R&D capabilities will significantly benefit