The food and beverage sector faces another decline, with valuations at unusually low levels! Huabao Fund's Food and Beverage ETF (515710) remains volatile at low prices, and institutions are optimistic about a recovery in the baijiu market.

The food and beverage sector fell back into a correction today (March 12). The Huabao Food & Beverage ETF (515710), which reflects the overall trend of the sector, continued to fluctuate at low levels. As of the latest report, the intraday price dropped 0.71%.

In terms of constituent stocks, major brands led the decline. As of the report, New Hope Dairy was close to hitting the daily limit down; Tainong Food, Dongpeng Beverage, Xin Nuo Wei, Andy Su, and others also saw significant declines, dragging down the sector.

On the news front, recently, the official WeChat account of Kweichow Moutai released a set of operational data during the Spring Festival period. During the holiday, the total number of logged-in users of Kweichow Moutai exceeded 14 million; since the beginning of the year, over 2 million users successfully purchased products through the platform.

Some analysts pointed out that the impressive Spring Festival operational data for Kweichow Moutai has boosted market confidence in the sales of leading liquor companies. The company’s valuation center is expected to be supported. The digital marketing achievements are significant, not only optimizing channel structure but also setting a benchmark for industry transformation. This may trigger capital evaluation of the consumer sector and accelerate market confidence recovery.

From a valuation perspective, the food and beverage sector is still undervalued. Data shows that as of yesterday’s (March 11) close, the Food & Beverage ETF Huabao (515710) target index’s segmented food index has a P/E ratio of 19.47 times, which is at the 2.55% percentile of the past 10 years, indicating a low valuation and highlighting long- to medium-term investment value.

Looking ahead, CITIC Securities stated that considering the liquor industry has been adjusting for many years, and is at a long-term cycle bottom with low market expectations and low holdings, any marginal improvement is expected to significantly boost sector sentiment. They are optimistic about a recovery in the liquor sector. Additionally, they forecast a gentle recovery in the beer industry by 2026, with the overall trend of stable volume and rising prices. They recommend focusing on industry leaders with firm strategic upgrades, strong channel control, and brand premium capabilities.

Wanlian Securities pointed out that by 2026, the food and beverage industry will mainly focus on bottoming out and recovery. Due to demand revival, cost improvements, and industry differentiation, there are structural investment opportunities. They suggest paying attention to: ① Leading white liquor companies with inventory clearance, low valuation, and high dividends; ② Leading beer, condiment, and dairy companies benefiting from demand recovery and cost improvements; ③ Frozen food leaders embracing new channels amid easing price wars; ④ Soft drink leaders with competitive advantages in high-growth functional beverage tracks.

Note: When investors subscribe or redeem fund shares, the authorized broker may charge a commission of up to 0.5%, which includes related fees charged by stock exchanges, registries, etc. For detailed fund fee rates, see the fund legal documents.

Source: Shanghai and Shenzhen Stock Exchanges, etc., as of March 12, 2026. Reminder: Recent market volatility may be significant; short-term fluctuations do not predict future performance. Investors should invest rationally based on their own financial situation and risk tolerance, paying close attention to position sizing and risk management.

Risk warning: The Huabao Food & Beverage ETF tracks the CSI Sub-industry Food & Beverage Industry Theme Index, which was established on December 31, 2004, and published on April 11, 2012. The index components are adjusted periodically according to the index rules. Its backtested historical performance does not predict future results. The individual stocks mentioned are only objective examples of index components and do not constitute stock recommendations or reflect the views of the fund manager or investment direction. Any information in this article (including but not limited to stocks, comments, forecasts, charts, indicators, theories, or any form of statements) is for reference only. Investors are responsible for their own investment decisions. The opinions, analysis, and forecasts in this article do not constitute investment advice and do not hold the author or publisher liable for any direct or indirect losses caused by using this content. Investors should carefully read the “Fund Contract,” “Prospectus,” “Fund Product Summary,” and other legal documents to understand the fund’s risk-return characteristics and choose products suitable for their risk profile. Past performance does not indicate future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. According to the fund manager’s assessment, the risk level of the Huabao Food & Beverage ETF is R3—medium risk, suitable for balanced (C3) and above investors. Suitability opinions are subject to the sales institution. Sales institutions (including the fund manager’s direct sales channels and other sales agencies) evaluate the risk according to relevant laws and regulations. Investors should pay attention to the suitability opinions issued by the fund manager. The risk level assessments provided by sales agencies may vary and should not be lower than the fund manager’s assessment. Differences may exist between the fund’s risk-return features and its risk level due to different considerations. Investors should understand the fund’s risk-return profile, consider their own investment goals, time horizon, experience, and risk tolerance, and choose funds carefully, bearing their own risks. The China Securities Regulatory Commission’s registration of the fund does not imply any substantive judgment or guarantee of its investment value, market prospects, or returns. Investment in funds should be cautious.

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