According to the Zhitong Finance APP, Guosen Securities released a research report stating that based on historical experience, macro policies are intensive in the fourth quarter. Against the backdrop of a low fundamental base, low expectations in the capital market, low institutional holdings, and expectations of interest rate cuts by the Federal Reserve, any changes on both the supply and demand sides could catalyze stock price increases. For example, the expectation of a slowdown released at the liquor distributors' conference. The firm is optimistic about investment opportunities in the fourth quarter and suggests focusing on sectors with high policy sensitivity, such as liquor and the catering supply chain (prepared dishes).

The main points of Guosen Securities are as follows:

Market Review

Affected by insufficient domestic demand and consumer confidence, the food and beverage sector has underperformed the index this year, with A-shares and H-shares cumulatively rising by 1%. Among them, A-share food and beverage (Shenwan) fell by 4.7%, significantly underperforming the CSI 300 (+17.9%); H-share food and beverage (Shenwan) rose by 29.5%, underperforming the Hang Seng Index (+34%).

Category Differentiation, Stronger Players Remain Strong

Since the second quarter, liquor has been under pressure due to policy impacts, with the stock prices of Kweichow Moutai and liquor (excluding Kweichow Moutai) down 5.5% and 5.8% respectively since the beginning of the year. There are signs of improvement in mass-market products, with a significant leader effect, rising by 13.4% in the first three quarters, with beverages (Nongfu Spring, Dongpeng Beverage, etc.) and snacks (Weilong, Yanjinpuzi) performing the best.

Reform Empowerment, Increased Hotspots, Enhanced Bottom Signals

Since the beginning of this year, many companies have actively carried out reforms in channels, products, and organizations, reshaping the industrial ecosystem through digitalization, with initial effects becoming apparent. There has been an increase in hotspots such as maternity subsidies, coconut water, sugar-free tea, konjac snacks, sparkling yellow wine, Zhenjiu Lidu·Dazhen new model, JGJC·Free Love, etc., enhancing bottom signals in the sector.

Outlook for the Fourth Quarter

As the impact of liquor consumption policies in the second quarter gradually weakens, the demand for liquor and catering supply chains is entering a recovery phase, and positive signals will also emerge on the supply side. For example, a consensus among local governments in liquor-producing regions to slow down production has formed. The firm believes that core prosperity indicators in the sector, such as the price of Feitian Moutai, have room for improvement in the fourth quarter.

Risk Warning: Risks such as demand recovery being slower than expected, continuous increases in supply of liquor and dairy products leading to significant price declines, and public opinion risks arising from food safety issues