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<Research>G Sachs Upbeat About Condiment/ Prepared Food Sector, Favoring HAITIAN FLAV, ANJOY FOOD; CN Essential Goods Demand for Spring Festival Beats, Focus on Cost Fluctuations
Recommend 5 Positive 3 Negative 2 |
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Due to the later Spring Festival holiday, the Chinese essential consumer goods industry saw strong shipment data in January 2026, with Spring Festival demand exceeding expectations, Goldman Sachs said in its research report. The broker is encouraged by the resilience and even better-than-expected shipment and sales data for February. Heading into 2Q26Y, Goldman Sachs anticipates a slowdown in shipments in March, but expects post-Spring Festival channel inventory levels to remain healthy. Leading value retail brands (such as BUSYMING (01768.HK) and WANCHEN GROUP (300972.SZ)) keep penetrating the market. However, cost fluctuations will be a key factor affecting stock prices in the short term. In Goldman Sachs estimate, competition in the beverage industry will intensify after entering the peak season. For example, TINGYI (00322.HK) will promote green tea products through QR code promotions, EASTROC (09980.HK) will actively establish its presence in the sugar-free tea market, and NONGFU SPRING (09633.HK) will focus on electrolyte water. Goldman Sachs prefers the condiment/prepared food sectors, such as HAITIAN FLAV (03288.HK), ANJOY FOOD (02648.HK), YIHAI INTL (01579.HK), and dairy product makers like MENGNIU DAIRY (02319.HK) and YILI (600887.SH), due to the bottoming-out demand trend, improved supply-demand cycles, and relatively minor impact from general PET cost fluctuations in the short term. The broker has also reiterated a constructive view on KWEICHOW MOUTAI (600519.SH), EASTROC, NONGFU SPRING, and WL DELICIOUS (09985.HK), based on their strong brands and execution capabilities, long-term market share acquisition ability, and new product launches, although PET costs remain a key variable in the short term. Details on Goldman Sachs' ratings and target prices for retail stocks are available in a separate table. AAStocks Financial News |
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