【Changjiang Food & Beverage】Break and Build - 2026 Mid-Year Investment Strategy

English summary

Entering 2026, the industry began to show relatively positive marginal changes, with mass consumer goods leading the marginal recovery, baijiu still bottoming out and adjusting. Meanwhile, leading companies continued to gain share, and small and medium-sized enterprises accelerated their exit. The industry is shifting from "extensive scale growth" to a new development stage characterized by "channel system fragmentation, deep consumer insight, and price system reconstruction." In the second half of the year, with multiple factors resonating such as low base effects, accelerated channel adjustment, and consumption peak catalysts, the industry is expected to continue a moderate overall recovery, with structural opportunities expected to remain significantly better than the overall beta. In the second half, baijiu sales are expected to improve marginally against a low base, but the recovery speed will still be slow. However, market expectations are likely to recover ahead of fundamentals. Referring to the bottom of the previous cycle, when the year-on-year decline in sales and wholesale prices began to narrow, valuations and fund holdings had already adjusted to historically low levels. Improvement in capital flows often leads to sector valuation recovery, earlier than fundamental improvement. ...