Goldman Sachs: Mainland China's demand for essential goods during the Spring Festival exceeded expectations, focusing on cost fluctuations and preferring the seasoning and pre-packaged food sectors such as Haitian (03288) and Anyi (02648).

Goldman Sachs released a research report stating that due to the late Spring Festival holiday, the mainland consumer goods industry had strong shipment data in January of this year, with Spring Festival demand exceeding expectations; and February shipment and sales data are more resilient, even surpassing expectations. Moving towards the second quarter of this year, Goldman Sachs predicts that shipments in March will slow down, and channel inventory levels are expected to remain healthy after the Spring Festival; the wholesale price of high-end spirits is expected to fall as scheduled after the peak season, but still remains resilient; the snack and beverage industry will introduce new products; top value retail brands (such as BUSYMING and Fujian Wanchen Food Group) will continue to penetrate the market. However, cost fluctuations are a key factor affecting stock prices in the short term; Goldman Sachs predicts that competition will intensify in the beverage industry after entering the peak season (such as Master Kong promoting green tea products through QR code promotions, Eastroc Beverage actively entering the sugar-free tea market, and NONGFU SPRING focusing on electrolyte water). Goldman Sachs prefers the seasoning/pre-packaged food sector, such as Foshan Haitian Flavouring and Food, Anjoy Foods Group, YIHAI INTL, and dairy products MENGNIU DAIRY and Yili, because these industries have bottomed out in demand, improved supply-demand cycles, and relatively small impacts under the widespread fluctuation of PET costs in the short term. Goldman Sachs also reiterated its constructive views on Kweichow Moutai, Eastroc Beverage, NONGFU SPRING, and WL DELICIOUS, based on their strong brand and execution capabilities, ability to gain market share in the long term, and new product launches, but PET costs remain a key variable in the short term.