Financial Data and Key Metrics Changes - The PBoC's outstanding size of liquidity facilities is RMB10 trillion, which has been declining due to the reduction in PSL since February 2024 [8][12] - The PBoC's claims on the government stood at RMB1.52 trillion in April, approximately 3.6% of total assets and 1.2% of China's GDP [23] Business Line Data and Key Metrics Changes - The CGB market has become increasingly liquid, with outstanding amounts exceeding RMB30 trillion in April 2024, representing about 23% of GDP [15][71] - The PBoC has expanded its toolkit to include various liquidity facilities, with a total outstanding size of RMB7.5 trillion [12] Market Data and Key Metrics Changes - The money multiplier has been impacted by RRR adjustments, with ongoing RRR cuts leading to a higher money multiplier [16][30] - CGB turnover volumes have been rising, indicating deepening liquidity in the market [71] Company Strategy and Development Direction and Industry Competition - The PBoC is not moving towards quantitative easing, as stated by the Governor, emphasizing the importance of stabilizing money supply [30][71] - The PBoC aims to ensure that the CGB curve aligns with fundamentals and to protect banks' net interest margins (NIM) [34][50] Management's Comments on Operating Environment and Future Outlook - The PBoC's management has indicated that incorporating bond trading into the policy toolbox does not equate to quantitative easing [71] - The PBoC is expected to maintain steady M2 growth at around 8%, implying a base money expansion of approximately RMB3 trillion per annum unless further RRR cuts are made [71] Other Important Information - The PBoC has a history of trading government bonds in the secondary market but is legally prohibited from trading in the primary market [23][71] - The PBoC has utilized various structural monetary tools to manage liquidity, including rediscounting and relending facilities [12][38] Q&A Session All Questions and Answers Question: Will the resumption of bond trading lead to quantitative easing? - The PBoC Governor clarified that incorporating bond trading into the policy toolbox does not mean quantitative easing [71] Question: What is the potential size of Treasury trading if adopted? - Assuming the PBoC aims to maintain steady M2 growth at ~8%, this would imply a base money expansion of ~RMB3 trillion per annum unless further RRR cuts are made [71]

Industry Investment Rating - The report does not explicitly provide an industry investment rating [1][2][3] Core Viewpoints - The report highlights the rise of "appearance economy" driven by increasing income levels, changing consumer attitudes, and the influence of social media [4] - The beauty and skincare industry is experiencing professionalization and diversification, with significant growth in the cosmetics, medical aesthetics, and oral beauty markets [4][16][19][23] - The report identifies eight key trends in appearance consumption, including younger demographics, male participation, and the rise of oral beauty products [5][26][31][34] Consumer Demographics - Female consumers dominate the appearance consumption market, accounting for 76% of the total, with males showing an 8 73% increase in participation from 2022 to 2023 [6] - The 25-35 age group is the most active in appearance consumption, making up over 40% of the market, followed by the 35-45 age group at 25% [8] - White-collar workers are the primary consumers, representing 61% of the total market [8] Market Trends - The cosmetics market in China reached 5169 0 billion yuan in 2023, with a 6 4% year-on-year growth, and is expected to grow to 5791 0 billion yuan by 2025 [16] - The medical aesthetics market in China reached 1461 billion yuan in 2023, with non-surgical procedures accounting for a significant portion, and is projected to reach 2046 billion yuan by 2025 [19] - The oral beauty market in China grew to 240 billion yuan in 2023, with collagen peptide products showing strong growth in both urban and rural markets [23][35] Product and Technology Trends - The report notes a shift towards more professional and technical products, with companies like Five Female Doctors and Bloomage Biotech leading in innovation and patent development [36][37] - The rise of "health-conscious" beauty products, such as collagen peptides and other oral supplements, reflects a growing consumer preference for internal beauty solutions [23][34] Regional and Channel Insights - Appearance consumption is expanding into lower-tier cities, with consumers in these areas showing strong purchasing power, particularly in the oral beauty segment [12][30] - Social media platforms like WeChat, Douyin, and Xiaohongshu are key channels for consumer decision-making, with over 60% of consumers relying on these platforms for product information [14][15] Conclusion - The report emphasizes the importance of maintaining quality and avoiding over-marketing in the appearance economy, calling for stricter industry regulations to ensure healthy market development [37]