Zhongtai Securities: Steady Increase in Beer Prices, Upward Structural Trend, Focus on Peak Season Pace

China-Tai Securities research reports say: On the revenue side, the beer industry’s overall revenue in 2025 will be flat, while regional liquor companies perform better; in the first quarter of 2026, revenue will register slight positive growth, business conditions will gradually pick up, the pricing center will move steadily upward, and continued expansion of mid-to-high-end “big” single products will drive upgrades to product mix, with both leading companies and regional targets generally seeing higher tonnage prices. On the profitability side, cost tailwinds combined with structural optimization jointly lift the industry’s gross margin; in the first quarter of 2026, most companies’ gross profit will improve year over year, with standout performances from Yanjing, Zhujiang, and others. At the same time, liquor companies push to reduce costs and improve efficiency; top companies optimize sales expense ratios and the gross-to-sales margin differential improves steadily, and overall expense deployment becomes more refined. Looking ahead, pay attention to the peak-season window, the recovery in catering demand, and catalysts from sports events, and expect performance upside to be released.

The full text is as follows

【China-Tai Food & Beverage】He Changtian: Baijiu accelerates consolidation and digestion; consumer goods prosperity rises for mass products—Summary of 2025 annual report and 2026 Q1 report for the Food & Beverage industry

Baijiu: The industry accelerates base-building, and leading liquor companies show marginal improvement in the first quarter. Sector revenue and profits both fall significantly year over year, with production volumes shrinking sharply from their peak levels. In the first quarter of 2026, marginal improvement at the industry level becomes visible: high-end baijiu recovers first, mid-to-high-end remains under pressure, and differentiation among regional liquor companies intensifies. The Baijiu sector’s overall revenue in 2025 was 3618.10 billion yuan, down 18.13% year over year; net profit attributable to shareholders was 1266.32 billion yuan, down 24.10% year over year; only Shanxi Fenjiu delivered positive growth. In 2026 Q1, revenue was 1326.21 billion yuan, down 0.69% year over year, with the decline narrowing substantially. Guizhou Moutai’s revenue and net profit contribution ratios both exceeded 40% and 50%, respectively, leading the industry’s repair. By price tiers, high-end liquor’s 2026 Q1 revenue rose 9.87% year over year, driven by increased Moutai direct sales volume, Wuliangye’s high growth off a low base, and Laojiao maintaining price support. Mid-to-high-end continues to face pressure due to constraints in scenarios, with revenue down 9.61% year over year. Regional liquor companies show clear divergence, with Yingjia Gongjiu leading the way. The sector’s gross margin holds at above 81%, and expense deployment shifts toward greater precision, focusing on brand and channel development.

Soft drinks: Sector performance diverges, with Dongpeng, Quan Yangquan leading the segment. In 2025, top players in soft drinks achieved high growth: Dongpeng Beverage’s revenue grew 31.80% year over year. In 2026 Q1, low-base rebounds are rapid for Yangyuan Beverages, Chengde Lulu, Xiangpiaopiao, and others; Xiangpiaopiao’s profit surged 597.41% year over year, while Happy Family and Li Zi Yuan remain under pressure. On the cost side, in 2026 Q1 PET prices increased by about 41.7% year over year due to oil prices. Companies locked in prices in advance to offset pressure, leading to year-over-year increases in gross margins for Dongpeng, Quan Yangquan, and Xiangpiaopiao. Expense deployment across the industry diverges: leading companies increase the point/network expansion fee rate, while Xiangpiaopiao’s cost control and efficiency improvements are notably significant.

Beer: Price increases and volume stability, upward structural shift—focus on the rhythm of the peak season window. 1) On the revenue side, the beer industry’s overall revenue in 2025 is flat, with regional liquor companies performing better. In 26Q1, revenue shows slight positive growth, prosperity gradually improves, the pricing center moves steadily upward, and continued volume expansion of mid-to-high-end “big” single products drives upgrades to product structure, with ton prices for both leading and regional targets generally moving higher. 2) On the profitability side, cost tailwinds combined with structural optimization jointly lift the industry’s gross margin. In 26Q1, most companies’ gross profit improves year over year, with standout performances from Yanjing and Zhujiang, among others. At the same time, liquor companies promote cost reduction and efficiency improvements: top companies optimize their sales expense ratios, and the gross-to-sales difference improves steadily; overall expense deployment trends toward more lean, fine-tuned management. Looking ahead, although the marginal benefit from raw-material cost tailwinds converges, structural improvement and more precision-focused expense investment still provide strong profit support. Keep an eye on the peak-season window, the recovery of catering demand, and catalysts from sports events, and expect release of performance elasticity.

Condiments: Marginal recovery in catering—seize the “double-click” opportunities of leading companies. In 2025, downstream catering demand for condiments faced pressure, mainly because the mid-year alcohol ban combined with reduced impact from stimulus policies such as consumption vouchers led to a drag. Signs of improvement emerged in H2. Against this backdrop, leading companies are more stable in performance: Haotian’s core categories grow steadily, smaller categories continue to expand through volume growth; Yihai’s B-end and overseas markets maintain high growth, and expansion of direct-operated supermarkets is progressing impressively. In 2026, considering that downstream catering shows signs of weak recovery, and that leading companies have both product structure upgrades and incremental growth from overseas expansion, it is recommended to seize the “double-click” opportunities of leading companies.

Frozen chain: Customized frozen products contribute incremental growth, and the momentum from new chain-store formats is upward. In 2025, the frozen food sector overall showed a rhythm of “low point first, then high,” with business conditions recovering quarter by quarter. In Q1, results were relatively sluggish due to the Spring Festival holiday timing mismatch and warm winter weather. In Q2, driven by a low base plus new product launches, performance improved slightly. In Q3, the Mid-Autumn Festival and National Day boosted recovery in an additive manner as catering demand moved marginally back. In Q4, entering the traditional peak season, sell-through accelerated, and most companies’ performance picked up speed. Entering 26Q1, benefiting from a longer inventory-preparation period due to a later Spring Festival plus a low base, Anjing, Qianwei, and Sanquan all achieved double-digit positive growth in revenue. For the chain segment, in 25H2, Beibi introduced a new small-steamed-bun store format; Guoqiān introduced a redesigned “big-store” model; Weizhi Xiang launched a new “Jing Gege” made-to-order stir-fry model. New formats catalyze improvements at same-store level, franchisee enthusiasm for joining remains high, and subsequent store openings are expected to enter an acceleration phase. Considering that downstream catering shows signs of marginal recovery, it is expected that competition in 2026 will become more rational. In 26Q1, most companies have already shown healthy growth in profit growth rates that are higher than their revenue growth rates, indicating a positive growth trend. The full-year outlook is optimistic, and the competitiveness of leading companies is expected to be further strengthened.

Dairy products: Supply and demand conditions improve step by step, and leading players recover first. In 2025, dairy demand remained relatively weak, with raw milk prices staying at low levels. Yili actively promotes balanced development across businesses: liquid milk, milk powder, and dairy products remain in the industry’s top position. The retail market share of low-temperature yogurt and low-temperature white milk increased. Both infant and adult nutrition products achieved double-digit growth. Xinruye targets a five-year goal of doubling net profit margins, reaching 6.5% in 25 years. In 2026, with the supply-side effects of capacity optimization becoming visible and consumers’ awareness of dairy improving, domestic raw-milk supply-and-demand conditions are expected to be better than in 2025. It is recommended to pay attention to the performance of low-temperature milk and deep-processed cheese products.

Snacks: Prosperity remains, while channel structure diverges. 1) On the revenue side, the snacks sector’s “opening of the door with a strong start” is fully realized and overall performance is good. Channel-side dynamics show clear differentiation: value stores, e-commerce, and membership-based supermarkets lead the industry. Value stores, supported by a de-intermediation model, high cost-performance, and high turnover logic, continue to expand with increasing scale and rising concentration. Membership stores become the second growth curve by leveraging selected SKU offerings and advantages in price-to-quality. E-commerce shifts from expansion in scale to price control and stable operations while optimizing cost efficiency. Companies with well-developed multi-channel layouts tend to have stronger earnings resilience. 2) On the profitability side, in 2025, some raw-material prices stayed high, and the increased share of low-gross-margin channels suppressed the sector’s net profit margin. In 26Q1, some raw-material prices saw marginal declines, and leading companies’ gross margin and net margin improved in tandem. Going forward, as cost tailwinds continue to be released and channel and product structures optimize, leading companies are expected to gradually release performance elasticity.

Risk warnings: Terminal demand recovery falls short of expectations; intensifying industry competition; pricing increases not landing as expected; food safety risks.

（Source: People’s Finance and News）