China Galaxy Securities has released a research report noting that in early October, a market style shift led to a recovery in the food and beverage index. Within the sector, snacks, beer, and health products saw notable increases. They believe that the style-switching trend is likely to continue. Looking ahead to late October, market attention will focus on the third-quarter earnings reports, with companies representing the new consumption direction expected to perform well. Investors should pay attention to these high-performing stocks and sectors. For Q4 2025, the firm suggests focusing on two clues: 1) The year-end valuation switching market, concentrating on targets in the new consumption direction with solid fundamentals; 2) With expectations that PPI improvements will gradually translate into CPI improvements, investors should also focus on cyclically advantageous sectors with low valuations and clearing supply. Key points from China Galaxy Securities include the following observations from the Autumn Sugar Fair: The 2025 Autumn Sugar and Wine Fair was held in Nanjing from October 11-15. Compared to the Spring Fair, this event featured primarily small and medium-sized brands, with leading brands mainly introducing cross-industry products. In terms of categories, health continues to be the main theme for product iterations, with related products maintaining strong demand; an increasing number of traditional category companies entering the space may reshape the industry landscape. 1) Baijiu: Feedback from the Weijiu Forum indicates a weak recovery during the Mid-Autumn Festival and National Day compared to the previous month, with year-on-year pressure. Given that current demand is near freezing, and channel inventory remains high, the destocking process is expected to take some time. 2) Beverages: The density of NFC juice layouts is high; many new companies have entered the coconut water market, while popular brands occupy prime locations and attract significant traffic, with some lesser-known companies showing signs of withdrawal compared to the Spring Fair. The flow of traditional Chinese health water has declined, but the market for birch juice has expanded. Some companies, such as Liangpinpuzi, are venturing into the beverage industry, showcasing several new soft drink products anchored in trendy categories. 3) Snacks: Health themes are emerging, with growth in products emphasizing formula optimization among traditional categories; some brands are also introducing medicinal snacks. There may be increased attention for subsections like canned fruits, meat snacks, and nut gift boxes; the potential for innovation in konjac products remains substantial. Companies like Huanlejia are launching various portable canned fruit products, aiming to capitalize on the leisure snack sector. 4) Dairy drinks: AD calcium milk is a hot category, with both leading and mid-sized brands significantly increasing their presence. Brands like Three Squirrels and Liangpinpuzi may benefit from shifting demand dynamics caused by Wahaha's public relations challenges, while nut milk and eight-treasure porridge are new entries from many manufacturers. For white milk, high-calcium milk for older adults and formulas tailored for seniors are expected to become important growth points in the industry. Data tracking shows that the wholesale price of baijiu has recovered since September, with the cost of raw materials diverging: The wholesale prices for Feitian baijiu on October 15 were 1785 RMB per case and 1760 RMB per bottle, flat compared to September 30, but down 535 and 505 RMB year-on-year; Eight Generations Wuliangye was 850 RMB, up 10 RMB from September 30, and down 110 RMB year-on-year; Guojiao 1573 was 850 RMB, flat compared to September 30, and down 10 RMB year-on-year. 2) Packaging materials: As of October 15, the prices of glass/PET/packaging film were down year-on-year by 4.6%, 13.7%, and 9.1%, respectively, while aluminum and carton prices were up by 1.5% and 12.2%. 3) Raw material costs: The prices of white sugar, flour, quail eggs, pork, and soybeans dropped year-on-year by 10.3%, 2.5%, 8.8%, 27.2%, and 0.8%, respectively; palm oil and sunflower seed prices rose by 4.7% and 2.7%. As of October 9, the price of domestic raw milk was 3.04 RMB per kilogram, down 2.9% year-on-year and unchanged from last month (September 30); the winning bid for GDT whole milk powder was 3696 USD per ton, up 3.8% year-on-year but down 2.5% month-on-month. Market tracking shows that most sub-sectors achieved positive returns: From October 1 to October 15, the food and beverage industry rose by 1.3%, outperforming the Wind All A Index by +2.1%, ranking 14th among 31 subsectors. Eight out of ten sub-sectors recorded monthly positive returns, with snacks, beer, health products, and fermented products experiencing leading gains of +3.5%, +3.1%, +2.9%, and +2.4% respectively. Risk warnings include incomplete understanding of exhibition information, demand recovery not meeting expectations, heightened industry competition, suboptimal effects of downstream channel transformations, and food safety risks.