CITIC Securities: Optimistic about the future performance and valuation repair space of public brands.

The research report from CITIC Securities pointed out that due to the unfavorable impact of the staggered Chinese New Year in 2025Q4, the fundamentals of the consumer goods sector in 2025Q4 are expected to weaken month-on-month. If we exclude the seasonal impact of the Chinese New Year and only observe from September to November, there are signs of stabilization in demand for the consumer goods industry. In terms of cost and expense, most raw material costs continue to benefit but have narrowed slightly, and although industry competition remains relatively high intensity, it is beginning to slow down. Among the consumer goods sectors, the catering supply sector is one of the few that has shown improvement in the fundamentals in 25Q4 compared to Q3, mainly benefiting from distributors stocking up and easing competition. Although the fundamentals of 25Q4 are weakening, we are optimistic about a strong start for the consumer goods sector in 26Q1, mainly benefiting from 1) the favorable impact of stocking up for the Chinese New Year; 2) expectations of stabilization in demand; 3) a slowdown in competition. Considering the low base brought about by the ban on alcohol consumption in 25Q2, we expect further improvement in the fundamentals of the consumer goods sector in 26Q2 compared to the same period last year. We are optimistic about the future performance and valuation recovery potential of the consumer goods sector, and currently recommend allocating around three main themes: 1) Pro-cyclical logic: Recommend the catering supply and dairy sectors. 2) Independent growth logic: Recommend the beverage and snack sectors with higher business sentiment. 3) High dividend defense strategy.