Open Securities: Consumer demand in March maintains a mild recovery, and the growth logic of snack enterprises is relatively good.

Guanyuan Securities released a research report stating that the month-on-month growth rate of social retail sales data in March 2025 increased, mainly due to the expansion of the "trade-in old for new" policy and the repair of consumer confidence. Looking forward to 2025, with the impact of Sino-US tariffs, it is expected that subsequent policies to stimulate domestic demand will significantly increase, vigorously boosting domestic consumer demand, and the food and beverage sector is expected to benefit. In terms of specific sectors, the liquor industry is basically at the bottom of its own cycle, with a high probability of stable upward movement in the future, entering a mid-to-long-term layout point. In terms of consumer goods, it is optimistic about the snack sector with channel reform and overseas market expansion dividends; recommends paying attention to the improvement of the beer industry under the recovery of catering industry; also suggests focusing on the dairy industry, which may accelerate the arrival of the balanced point of the birth policy concept and raw milk prices. The main views of Guanyuan Securities are as follows: Monthly observation: The month-on-month growth rate of social retail sales in March 2025 has risen, and the consumption growth of grain, oil, and food products is steadily increasing. In March 2025, the total retail sales of social consumer goods increased by 5.9% year-on-year, a month-on-month increase of 1.9 percentage points compared to January-February, with the growth rate of social retail sales data in March better than expected. On the one hand, the expansion of the "trade-in old for new" policy has a good driving effect on consumption of home appliances, communication equipment, furniture, etc. On the other hand, under the promotion of promotional policies, the growth rate of catering and retail consumption has accelerated. In March 2025, the year-on-year growth rates of catering and catering revenue above the quota increased by 5.6% and 6.8% respectively, with month-on-month increases of 1.3 percentage points and 3.2 percentage points compared to January-February, indicating a continued recovery in catering consumption. In terms of sub-industries, in March 2025, the year-on-year growth rates of grain, oil, and food products, beverage products, and tobacco and alcohol products were 13.8%, 4.4%, and 8.5% respectively, with month-on-month increases of 2.3%, 7.0%, and 3.0% compared to January-February. The consumption of grain, oil, and food products, as essential consumer goods, has seen steady growth, while the growth rates of beverage and tobacco and alcohol products have significantly recovered, which is expected to be related to the improvement in catering and nightlife consumption in March. Quarterly observation: The growth rates of social retail sales and catering data in Q1 2025 have rebounded, and the growth of grain, oil, and food products continues to be high. Observing the changes in quarterly data, the year-on-year growth rate of total retail sales of social consumer goods in Q1 2025 was +4.6%, with a month-on-month increase of 0.6 percentage points compared to Q4 2024, indicating that consumer demand is in a continuous improvement stage. The year-on-year growth rates of catering and revenue above the quota in Q1 2025 were +4.7% and +4.7% respectively, with month-on-month increases of 1.5 percentage points and 3.2 percentage points compared to Q4 2024, benefiting from the improvement in consumer demand in the first quarter, with catering consumption increasing. In Q1 2025, the year-on-year growth rates of grain, oil, and food products, beverage products, and tobacco and alcohol products were +12.2%, -0.5%, and +6.3% respectively, with month-on-month increases of 2.3%, 4.1%, and 3.5% compared to Q4 2024. Grain, oil, and food products maintained a high growth rate, while beverage products and tobacco and alcohol products showed good improvement in growth rate month-on-month, partly due to the pull of beverage and tobacco consumption during the busy season of January-February and partly due to the improvement in consumer confidence in March, driving the growth rate of optional consumption to rise. Industry observation: Leading liquor companies are undergoing a stable transition, while snack companies have a good growth logic. In Q1 2025, most liquor companies adjusted their targets moderately, slowed down channel payments and shipments, reduced channel pressure, and released risks under low expectations. The industry achieved a stable transition, with consumer demand basically stabilizing. It is expected that the performance of leading liquor companies in the first quarter will be relatively good, and with the decline in the base number in the second half of the year, the performance of liquor companies is expected to gradually increase. In the consumer goods sector, some snack companies may see a decrease in performance due to a high base number in the same period last year and the impact of the Spring Festival being out of sync. It is expected that the performance in Q2 will gradually accelerate. At the same time, the snack sector has a good growth logic, and the dividend of channel reform and category expansion is expected to help the industry maintain a high level of prosperity. Risk warning: Risks of fluctuating raw material prices, market operation risks, food safety risks, etc.