Market Buzz: Chinese Food Sector Sees Surge Amid Regulatory Boost

In a remarkable display of resilience, the Chinese food sector has witnessed a significant surge, with several companies experiencing notable gains. On May 19, 2025, stocks in the food and beverage industry showed exceptional activity, with companies like 巴比食品 (Babai Food) hitting their daily price limits, while others such as 立高食品 (Ligao Food) and 天味食品 (Tianwei Food) saw increases of over 10% and nearly 9%, respectively. 承德露露 (Cheng De Lolo) and 广州酒家 (Guangzhou Jiahe) also enjoyed gains exceeding 4%.

This uptick in the food sector’s performance can be attributed to a strategic move by the Chinese government. On May 16, 2025, the Ministry of Commerce and the National Development and Reform Commission jointly released the “Measures for the Promotion and Management of the Catering Industry.” Set to take effect on June 15, 2025, this comprehensive policy includes 25 articles aimed at significantly boosting the industry. The measures focus on encouraging international cooperation, digital development, revision of standards, and the cultivation of local specialty cuisines.

The introduction of these measures has been met with optimism, as they promise to invigorate the sector by fostering innovation and expanding market opportunities. Companies like Cheng De Lolo Co Ltd, which specializes in almond juice, fruit juice, fruit teas, and other beverages, stand to benefit from this regulatory support. Operating exclusively within China, Cheng De Lolo is well-positioned to capitalize on the government’s push for digitalization and the promotion of local flavors.

As the market reacts to these developments, investors are closely watching the food and beverage sector for further gains. With a market capitalization of 10.21 billion CNH and a price-to-earnings ratio of 15.68, Cheng De Lolo remains a key player in the industry. The company’s recent performance, with a close price of 9.98 CNH on May 15, 2025, reflects its potential for growth in this newly invigorated market landscape.

As the sector continues to adapt to these regulatory changes, the coming months will be crucial in determining the long-term impact on companies like Cheng De Lolo and their ability to leverage these opportunities for sustained growth.