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2026-01-13 12:08:57 Last year, China's consumer staples exhibited a split between the first and second half of the year, with the anti-corruption policy announced on May 18 serving as a watershed, Goldman Sachs’ research report said. Before the policy was unrolled, the sector performed steadily; however, post-policy, the sector underperformed the broader market due to weak demand and deflationary pressures. Nevertheless, some companies still achieved growth through product cycles, increased market share, or stable shareholder returns, such as NONGFU SPRING (09633.HK), CHINA PET (002891.SZ), WH GROUP (00288.HK), TINGYI (00322.HK), and BUD APAC (01876.HK). Looking ahead to 2026, Goldman Sachs viewed that the sector's recovery will still depend on the process of reflation and policy direction, with expanding domestic demand becoming a primary task, focusing on three major themes: (1) bottoming or turnaround; (2) channel reshuffle and the impact of private labels; (3) competition dynamics and cost trends. The broker assumed the sector is likely to bottom out in 2H26, especially with the cyclical recovery of spirits and dairy, and growth in ready-to-drink scenarios such as beer, condiments, and prepared foods. It is expected that spirits will gradually recover in 2H26, mainly due to the revival of business banquets and high-end demand, although inventory pressure in channels needs to be addressed in 1H26. The dairy sector may achieve a supply-demand rebalance in 2H26, influenced by continued upstream production cuts and policy support. Categories related to dining, such as beer, condiments, and prepared foods, will benefit from low base effects and cyclical recovery. ~ AASTOCKS Financial News Website: www.aastocks.com | |