2025-06-25 13:03Investment Rating - The report maintains a positive outlook on experience and learning-related services consumption names, recommending eight quality consumer services with an average forward P/E of 17x and 19% year-on-year sales growth [31]. Core Insights - Despite overall lackluster consumption trends in China post-reopening, selected "new consumption" stocks have significantly outperformed the MXCN index, with an average weighted index for Lunar New Year consumption rising by 21% compared to 10% for MXCN through June 12 [5][6]. - The ACGN sector has shown remarkable performance, with stocks like Pop Mart and Bloks rising by 155% and 94% respectively, while other sectors like Hainan travel/shopping and e-bikes lagged behind [5][6]. - The report highlights a structural shift in consumer behavior towards services over goods, with services consumption categories such as Transport & Communications and Education, Culture & Recreational Services growing at 15% and 18% year-on-year in 2023, compared to overall consumption growth of 9% [5][6]. - The report identifies nine experience and learning-related consumption names that are expected to benefit from favorable seasonal spending trends during the summer [5][31]. Summary by Sections New Consumption Trends - Two key trends identified are affordable treats, including ACGN goods and government-subsidized trade-ins, and experience-related consumption such as movies and travel [6][31]. - The report notes that leading affordable treats have outperformed year-to-date, indicating a shift in consumer preferences towards smaller pleasures rather than big-ticket items [5][6]. Valuation and Growth Potential - Valuation levels for top new consumption names are now comparable to established global brands, with significant upside potential for future growth [5][6]. - The report emphasizes that the ability to surprise on future growth is crucial for maintaining valuations in the new consumption space [5][6]. Recommendations - The report recommends focusing on experience and learning-related services, which are expected to benefit from seasonal trends and a structural shift towards services consumption in China [31]. - Specific companies highlighted include Tencent, NetEase, Trip.com, and Kuaishou, which are positioned well for growth in the digital entertainment and travel sectors [31].