China Galaxy Securities: New consumption is one of the core investment lines in the food and beverage sector, and the future will focus on the direction of big health food

The Zhitong Finance App learned that China Galaxy Securities released a research report saying that new consumption, represented by new categories, is one of the core investment lines in the food and beverage sector in 2025. The bank believes that this main line is expected to continue in 2026 and the long term, but there may be rotation within the new categories. Among them, health foods are the bank's key investment direction in the future. The bank believes that Big Health Food is rich in SKUs and has a long structure, similar to the snack sector investment logic. The core is to select listed companies with a layout of key categories.

The main views of China Galaxy Securities are as follows:

Overall dimension: Demand and channels have ushered in deep changes, and the 600 billion health food market has taken a new turn

Big health foods include natural health foods vs. nutritious health foods. Currently, the total market size is about 600 billion yuan. External demand and channels have undergone profound changes since 2025:1) On the demand side, on the one hand, the consumer group has expanded from the “silver hair class” to the younger group; on the other hand, the consumption scenario has expanded from disease prevention to personalized demands such as emotional relief and weight management, and in addition, product forms have evolved from drug iterations to gummies, etc.; 2) On the channel side, interest e-commerce, cross-border e-commerce, and member supermarkets have emerged to better solve the problems of lack of consumer trust and category of big health foods. Driven by this, in recent years, Big Health Foods has ushered in structural prosperity in the category. Products such as oats, walnuts, sports health, and intestinal management have achieved rapid growth, and related listed companies have performed well.

Category Map: “Efficacy-Scene-Price” Golden Triangle, focusing on oats, corn, walnuts, etc.

The bank believes that Big Health Food is rich in SKUs and has a long structure, similar to the snack sector investment logic. The core is to select listed companies with a layout of key categories. From this perspective, the bank believes that categories that meet the three elements of “functional scenario - price” can easily create large single products. It is recommended to focus on: 1) Oats, which have a market size of 10 billion yuan, have low GI characteristics, and are in the popular price range. In addition to the staple food scene such as breakfast, it can be used as snacks, fitness supplements, etc.; 2) Corn: the market size is about 200 billion yuan, with low GI characteristics. The price is widely accepted, and the market size is about 80 billion yuan, and can be used not only as a staple food but also as a snack; 3) walnuts: about 80 billion yuan Good for mental and mental health, the price is neutral to tree nuts Obviously, the scenario expands from snacks to health scenarios; 4) Black sesame: beneficial for “nourishing hair care”, has a rich flavor, and the price is equivalent to 1 yuan/bag. In addition to traditional preparation scenarios, the scene can also be extended to baked goods, snacks, etc.; 5) Sports and health: The market size is about 6 billion yuan, which is expected to continue to expand as the number and professionalism of fitness people increase; 6) Gut health: The online scale is estimated to be about 4 billion yuan, of which probiotics account for more than 75%, and the market size will expand rapidly.

Key companies: Companies that focus on potential categories are expected to achieve rapid growth in performance

1) Seared wheat food: A leader in the domestic cereal industry. The performance has ushered in accelerated growth. Revenue CAGR of about 18% in the past 3 years and net profit CAGR of about 9% to mother, mainly due to category structure upgrades (compound oatmeal), expansion of emerging channels (e-commerce and snack volume sales, etc.) and cost-side dividends. 2) October Rice Field: A new staple food consumer brand with rapid growth. The revenue CAGR is about 17% in the past 3 years, and the adjusted net profit CAGR is about 10%, mainly due to the rapid growth of the main rice product (internal upgrade+expansion of modern channels) and the second growth curve of corn (in line with healthy consumption trends). 3) Grain Mill: A leader in walnut and sesame powder, recovering from a trough. Revenue CAGR of about 9% in the past 3 years, and net profit CAGR of about 29%. This is mainly due to the adjustment of KA channels and the expansion of e-commerce and member store channels. 4) Xianle Health: Leading domestic CDMO with new consumption and globalization, with annual revenue of about 21% in the past 3 CAGR and net profit CAGR of about 12%; 5) Junyao Health: Probiotic food pioneer, B-side and C-end dual-wheel drive, revenue CAGR of about 17% in the past 3 years.

Risk warning: risk of new channel expansion falling short of expectations; risk of demand for new categories falling short of expectations; risk of industry competition exceeding expectations; risk of food safety issues.