Investment Rating - The report maintains an "Overweight" rating for the industry, with a focus on new consumption sectors such as beauty care, IP derivatives, and gold jewelry [5][32]. Core Insights - The report highlights the recent tax policy changes regarding gold, which exempts value-added tax for standard gold transactions, potentially boosting market activity [3][22]. - The beauty care sector shows mixed performance, with some companies reporting significant revenue growth while others face declines [4][25]. - The report emphasizes the importance of domestic brands in the beauty market, with notable rankings in the Douyin beauty list indicating a shift towards local products [22][23]. Market Performance - During the week of October 27 to October 31, 2025, the retail trade, social services, and beauty care sectors experienced changes of +1.63%, +0.45%, and -2.21% respectively, ranking 8th, 17th, and 30th among 31 primary industries [13][15]. - The cosmetics sector faced a decline of -2.57%, while segments like trade and e-commerce performed well with increases of +3.44% and +2.97% [15][18]. Key Company Announcements - Shanghai Jahwa reported a revenue of 4.961 billion yuan for the first three quarters of 2025, a year-on-year increase of 10.8%, with a net profit growth of 149.1% [25]. - Proya Cosmetics achieved a revenue of 7.098 billion yuan, reflecting a modest growth of 1.89% [25]. - The opening of Pop Mart's first store in the Middle East marks a significant expansion for the brand [29]. Investment Recommendations - The report suggests focusing on companies such as Shiseido, Giant Bio, Marubi, Runben, Proya, Chaohongji, and Furuida as potential investment targets within the recommended sectors [5][32].

Group 1 - The service industry is expected to benefit from favorable policies, with a significant increase in service consumption anticipated in 2026 due to continuous policy support and demand dividends [3][7][11] - The report highlights the structural growth in emotional value and symbolic consumption, particularly in the IP toy industry, which is rapidly realizing commercial value [3][7][9] - The retail industry is undergoing a transformation towards a decentralized model, with traditional retail facing intense competition and new channels like discount stores and community supermarkets emerging [3][7][9] Group 2 - The report emphasizes the importance of optimizing holiday arrangements and integrating cultural tourism to stimulate demand, particularly for families with children [12][15] - The service consumption structure in China shows significant room for growth, with the current per capita service consumption being much lower than that of developed countries [29][30][32] - The tea and coffee beverage market in China is experiencing rapid growth, with the market size expected to increase significantly, driven by consumer demand in lower-tier cities [56][58][59] Group 3 - The online travel agency (OTA) market is projected to maintain stable profit margins, with companies like Trip.com leading in growth despite slight slowdowns in overseas markets [48][54] - The hotel industry is seeing a gradual improvement in operating data, with a narrowing decline in revenue per available room (RevPAR) expected to continue [37][40][43] - The report indicates that the demand for travel and tourism services is stable, with business travel being a significant source of fluctuations in demand [40][41]

Core Points - The Shanghai Composite Index closed at 3960.19 points, with a decline of 0.41% and a total trading volume of 1,938.395 billion yuan [1] - A total of 107 A-shares experienced a death cross, where the 5-day moving average fell below the 10-day moving average [1] Group 1: Stocks with Significant Death Cross - Hongyuan Electronics (603267) had a 5-day moving average of 52.69 yuan, down 1.97% from the 10-day moving average of 53.74 yuan, with a current price of 48.86 yuan, representing a deviation of -9.09% [1] - Zhongjian Technology (002779) reported a 5-day moving average of 123.82 yuan, down 1.88% from the 10-day moving average of 126.19 yuan, with a current price of 117.70 yuan, showing a deviation of -6.73% [1] - ST Huizhou (002122) showed a 5-day moving average of 3.56 yuan, down 1.41% from the 10-day moving average of 3.62 yuan, with a current price of 3.23 yuan, indicating a deviation of -10.65% [1] Group 2: Additional Stocks with Death Cross - Chao Hongji (002345) had a 5-day moving average of 13.02 yuan, down 1.33% from the 10-day moving average of 13.20 yuan, with a current price of 11.69 yuan, reflecting a deviation of -11.43% [1] - Kema Technology (301611) reported a 5-day moving average of 54.35 yuan, down 1.30% from the 10-day moving average of 55.06 yuan, with a current price of 52.30 yuan, showing a deviation of -5.02% [1] - Chuangyi Tong (300991) had a 5-day moving average of 40.78 yuan, down 1.26% from the 10-day moving average of 41.30 yuan, with a current price of 39.27 yuan, indicating a deviation of -4.91% [1]

Core Insights - Chao Hong Ji is focusing on four core product development directions: "Intangible Cultural Heritage Flower Silk," "Ancient Craftsmanship," "Beaded Braiding," and "Popular IP" to build a competitive advantage in product uniqueness and craftsmanship [1] Product Development - In Q3, Chao Hong Ji continued to innovate and iterate on the "Intangible Cultural Heritage Flower Silk" brand series, enriching the "Oriental Aesthetics" gold product line with new products such as "Flower Silk • Wind and Rain Bridge," "Flower Silk • Fortune and Prosperity," "Pure Gold • Fragrance," "Pure Gold • Clear Blue," and "Pure Gold • Auspicious" [1] - The company received widespread market acclaim for its superior craftsmanship in these new product launches [1] IP Collaboration - In Q3, Chao Hong Ji added two new IP licensed series: "Butter Bear" and "Cat Fortune Sandy," providing consumers with products that offer greater value and emotional resonance [1] - The company is continuously enhancing its differentiated IP collaboration ecosystem [1]

Core Viewpoint - The company has successfully implemented its brand philosophy of "interpreting Eastern culture through fashion" across various product lines, leading to significant market feedback and high growth in retail and revenue [1][2] Group 1: Product Innovation - The company launched a series of high-weight, high-ticket brand products since the second half of last year, including the "Zhenjin Zhenzuan," "Fanhua," and "Palace Culture" series, which received positive market responses [1] - New product lines such as "Hua Si · Fengyu Qiao," "Hua Si · Fulu," "Zhenjin · Fanghua," "Zhenjin · Jilan," and "Zhenjin · Ruiyou" were introduced in the third quarter, showcasing the company's strong product innovation capabilities [1] Group 2: Operational Efficiency - The company has made continuous investments in refined operations and digital empowerment, leading to improved operational capabilities in the gold category, which complements product strength [1] - Despite a reduction in the number of self-operated stores, revenue from self-operated channels achieved double-digit growth in the first three quarters, with a steady increase in quarterly gross margin [1] Group 3: Franchise Expansion Strategy - The company has actively pursued a light-asset expansion strategy focused on franchising, resulting in a net increase of 144 franchise stores in the first three quarters [2] - Although the increase in franchise proportion slightly reduced gross margin, refined management led to a decrease in expense ratios by 2.89 percentage points, enhancing profit elasticity and increasing the sales net profit margin (excluding goodwill impact) to 7.8% [2] - The company's efforts have resulted in record-high profitability and overall return on net assets in its jewelry business, indicating a positive trend in profitability that is expected to continue [2]

Core Viewpoint - The company has initiated overseas market expansion since last year, establishing a presence in Southeast Asia with multiple stores [1] Group 1 - The company has opened 7 jewelry stores in Malaysia, Thailand, Cambodia, and Singapore [1] - There is a recognition of market potential in overseas markets [1] - Future expansion plans will focus on Southeast Asia as the core region [1]

Core Viewpoint - Chao Hong Ji is focusing on product development around four core directions: "intangible cultural heritage flower silk," "ancient high craftsmanship," "beaded weaving," and "popular IP," aiming to create a competitive advantage through unique products and leading craftsmanship [1] Group 1: Product Development - The company is continuously innovating and iterating on the "intangible cultural heritage flower silk" brand series, enriching the "Oriental aesthetics" gold product line [1] - New products launched in the third quarter include "Flower Silk • Wind and Rain Bridge," "Flower Silk • Fortune and Prosperity," "Zhenjin • Fragrance," "Zhenjin • Clear Blue," and "Zhenjin • Auspicious" series, which have received widespread market acclaim for their excellent craftsmanship [1] Group 2: IP Collaboration - In the third quarter, the company added two new IP collaboration series: "Butter Bear" and "Cat Fortune Sandy," providing products that offer greater value and emotional resonance for consumers [1] - The company is continuously enhancing its differentiated IP collaboration matrix to strengthen its ecological layout [1]

Core Insights - The company has expanded its overseas market presence by opening 7 jewelry stores in Malaysia, Thailand, Cambodia, and Singapore since last year [1] - The company recognizes the potential market space in overseas markets and plans to focus on Southeast Asia for future expansion [1] Company Expansion - The company initiated its overseas market expansion last year [1] - The focus will be on Southeast Asia as the core region for further development [1]

Group 1: Company Performance - The company achieved high growth in Q3 2025, with a significant increase in revenue and retail terminal performance, despite a slight decline in overall gross margin [2] - The net profit margin (excluding goodwill impairment) increased to 7.8%, reflecting improved profitability due to refined management and cost control [3] - The company’s net asset return rate reached a historical high, driven by continuous efforts in operational efficiency and product innovation [3] Group 2: Product Development - The company focuses on four core directions in product development: "intangible cultural heritage flower silk," "traditional high craftsmanship," "beaded braiding," and "popular IP," enhancing product uniqueness and craftsmanship [4] - New product lines launched in Q3 include "Flower Silk: Wind and Rain Bridge," "Flower Silk: Fortune and Prosperity," and several "Zhenjin" series, receiving positive market feedback [5] - The company has established a systematic product development capability, allowing it to adapt to market trends and consumer demands effectively [3] Group 3: E-commerce Strategy - The company has optimized its e-commerce strategy, focusing on brand consistency and collaborative marketing, leading to improved profitability despite stable online revenue [6] - The introduction of high-margin products from offline to online channels has contributed to the growth in profitability [6] Group 4: Expansion Plans - The company has opened 7 stores in overseas markets, including Malaysia, Thailand, Cambodia, and Singapore, indicating a strategic move towards Southeast Asia for future expansion [7] - The franchise model has led to an increase of 144 new franchise stores in the first three quarters, although this has slightly impacted gross margin [3]

Market Overview - The A-share market experienced fluctuations in the morning session, with both the Shenzhen Component Index and the ChiNext Index dropping over 1% [1] - The total trading volume in the Shanghai and Shenzhen markets reached 1.22 trillion, a decrease of 164.8 billion compared to the previous trading day [1] - Over 3,700 stocks in the market declined, indicating a broad-based downturn [1] Sector Performance - The Fujian sector showed resilience, with Pingtan Development achieving 10 consecutive trading limits in 13 days, and other stocks like Fulongma also hitting the daily limit [3] - Semiconductor equipment stocks rebounded, with Zhongwei Company rising over 7% [3] - The coal sector remained active, with Antai Group achieving 8 trading limits in 14 days [3] - Conversely, the robotics concept stocks collectively fell, with companies like Anpeilong and Tuopu Group experiencing significant declines [3] - The innovative drug concept faced volatility, with Changshan Pharmaceutical nearing a trading halt [3] - Gold concept stocks saw multiple declines, with Chaohongji continuing to weaken [3] Index Performance - By the end of the trading session, the Shanghai Composite Index fell by 0.19%, the Shenzhen Component Index dropped by 1.27%, and the ChiNext Index decreased by 1.51% [3]