Summary of Conference Call Records Industry: Baijiu (Chinese Liquor) Key Points and Arguments 1. **Emerging Channels and Consumer Trends** The live streaming phenomenon at the Nanjing Sugar and Wine Fair highlights the penetration of new channels like instant retail in the baijiu industry. The popularity of light bottle liquor priced under 100 yuan indicates robust consumer spending and a trend towards consumption upgrades [1][3]. 2. **Performance During Mid-Autumn and National Day** The baijiu industry performed slightly better than expected during the Mid-Autumn and National Day holidays. Notably, the sales of Yanghe Jinshuiyuan exceeded company expectations, with significant year-on-year growth in sales volume and banquet sessions. However, the overall banquet sales growth was modest due to a decline in the number of bottles opened per banquet [4][5]. 3. **Consensus on Industry Bottoming** There is an increasing consensus that the baijiu industry has reached its bottom, but expectations for recovery remain cautious. Demand is currently affected by alcohol bans and economic downturns, while supply is entering a destocking phase. Moutai's prices have stabilized, and distributor inventories are low [6]. 4. **Price Trends and Distributor Conditions** Moutai's post-holiday prices exceeded expectations, with stable original box prices around 1,780 yuan. Distributors' inventory levels are healthy, with a turnover rate of about one month. In contrast, Wuliangye faces price inversion and subsidy pressures, leading to a challenging situation for both Wuliangye and Luzhou Laojiao [7][8]. 5. **Projected Performance for Q3 2025** For Q3 2025, Moutai is expected to maintain mid-to-high single-digit growth, while Wuliangye may see double-digit revenue growth but with larger profit margins. Luzhou Laojiao is also projected to achieve double-digit growth in both revenue and profit, while Fenjiu and Gujing Gongjiu are expected to decline significantly [9][10]. 6. **Future Outlook and Recommendations** The baijiu industry is currently at a fundamental bottom, with a potential adjustment period from Q2 to Q1 of the following year. The valuation appears attractive. Recommended stocks include leading brands like Moutai, Fenjiu, Gujing Gongjiu, and Jiansu Yuer, as well as dividend-paying companies like Wuliangye, Luzhou Laojiao, and Yanghe. Attention is also drawn to flexible stocks like Zhenjiu Lidu [10][11]. Industry: Beverage Key Points and Arguments 1. **Steady Growth in Beverage Sector** The beverage industry is experiencing steady growth in Q3 2025, with standout performances from tea drinks, traditional health waters, electrolyte waters, and coconut water. Companies like Nongfu Spring and Dongpeng Special Drink are seeing rapid revenue growth, with profit margins expected to improve [2][12]. 2. **Differentiated Performance of Major Brands** In Q3 2025, Master Kong benefited from price increases, while Uni-President faced challenges due to delivery subsidies. Master Kong's instant noodle business returned to low single-digit growth, while its beverage segment experienced a mid-single-digit decline [13][14]. 3. **Emerging Categories and Competitive Landscape** New categories such as tea drinks and health-oriented beverages are showing significant potential for growth. The competitive landscape is intensifying due to declining raw material prices and increased subsidies from delivery platforms [12][16]. 4. **Long-term Growth Potential** Companies like Nongfu Spring and Dongpeng Special Drink are recommended for their strong brand power and growth potential, with expectations for continued performance above industry averages in the coming years [15]. Industry: Dairy Products Key Points and Arguments 1. **Dairy Sector Challenges** The dairy sector is facing a decline in supply and weak downstream demand. The number of dairy cows has decreased, while milk prices have risen slightly. Companies like Yili are expected to see modest revenue growth, while Mengniu may experience a decline due to previous high bases [18]. 2. **Market Dynamics and Future Outlook** The overall dairy market is expected to stabilize in 2026, with potential improvements in competition dynamics as raw milk prices balance out. Companies like New Dairy, Mengniu, and Yili are seen as having certain investment value [18]. Industry: Snack and Frozen Food Key Points and Arguments 1. **Snack Industry Performance** The snack industry is developing steadily, with franchisees favoring larger stores. Despite a slight decline in average transaction prices, new product categories are expected to drive growth. Companies like Wancheng are projected to achieve significant revenue growth [19][20]. 2. **Frozen Food Sector Trends** The frozen food sector is experiencing flat performance, with slight revenue growth but ongoing profit pressures. Companies like Anjijia and Qianwei Central Kitchen are seeing modest revenue increases, while others like Baobi are benefiting from lower pork costs [22][23]. 3. **Future Growth Expectations** The snack sector is anticipated to perform better in 2026, with cost pressures easing and new channel opportunities emerging. Companies are encouraged to adapt to market changes and explore new distribution channels [21]. Industry: Beer Key Points and Arguments 1. **Beer Industry Performance** The beer industry is facing moderate demand, with on-premise channels underperforming. However, off-premise channels are showing resilience, with moderate sales growth. Companies like China Resources Beer and Qingdao Beer are expected to see slight revenue increases [24][25]. 2. **Cost and Profitability Trends** The cost of beer production is expected to stabilize, with key variables focusing on ASP (average selling price) increases and cost-saving measures. Companies with strong operational capabilities, such as China Resources Beer and Yanjing Beer, are recommended for investment [25][26].

Group 1 - The core conclusion is that Chinese assets are entering a "golden era" as the Federal Reserve resumes interest rate cuts, leading to a return of cross-border capital and national wealth to China, which will benefit manufacturing and consumption assets [1][10]. - The foundation of this "golden era" is the competitive advantage of China's manufacturing exports, which has been strengthened by recent years of intense competition, allowing for continued accumulation of national wealth despite external challenges [2][13]. - The path to this "golden era" involves the recovery of A-share profits and cash flows, driven by export expansion and consumption upgrades, replacing previous reliance on capital expenditure [3][21]. Group 2 - The expansion of high-end manufacturing exports is crucial for the "golden era," as it leads to long-term appreciation of the RMB and the return of foreign capital, enhancing consumer spending power [4][14]. - The anticipated "big liquidity injection" by the Federal Reserve is expected to accelerate the return of cross-border capital to China, leading to a systematic revaluation of Chinese manufacturing and consumption assets [4][28]. - The report suggests a strategic allocation towards sectors that are expected to reach new highs, including precious metals, new consumption categories, and high-end manufacturing, as the market transitions into a "re-inflation bull" phase [5][30]. Group 3 - The market has recently shown a shift towards undervalued sectors, indicating a potential recovery in A-share performance as manufacturing and consumption sectors are poised for a rebound [8][33]. - Economic indicators such as the manufacturing PMI and consumer confidence are showing positive trends, which may support the recovery of consumer spending and overall economic activity [45]. - The report highlights the importance of monitoring key economic data and market trends to identify further investment opportunities in the context of the anticipated recovery of Chinese assets [6][41].

[Table_Title] 研究报告 Research Report 19 Oct 2025 香港策略 Hong Kong Strategy 短期回调空间初步释放，布局窗口逐步打开 Short-Term Pullback Largely Priced In, Entry Window Gradually Opening 周林泓 Amber Zhou 李加惠 Jiahui Li, CFA amber.lh.zhou@htisec.com jh.li@htisec.com [Table_yemei1] 观点聚焦 Investment Focus [Table_summary] (Please see APPENDIX 1 for English summary) 上周我们提到，周初下跌将触发短期超跌反弹，然而，受中美元首会晤不确定性影响，10月市场仍大概率维持震 荡格局。行业方面，市场风格或逐步转向红利与低位蓝筹相对占优。本周中美贸易摩擦持续升温，市场情绪未能 一步到位释放，导致指数在反弹后反复受压，整体呈现高位震荡回落格局。全周来看，上证综指下跌2.5%，创业 板指下跌5.7%，周线回落至10日线附近；港股回调 ...

Core Insights - The 15th Beijing Commercial Service Skills Competition was held on October 18, showcasing nearly 600 finalists selected from over 10,000 initial participants across 20 competition categories [1][8] - The event was co-hosted by five government departments and organized by 16 industry associations, emphasizing the importance of skill development in various sectors [1][8] - The competition featured both traditional and innovative projects, reflecting the core needs of the industry and trends in digital economy and consumer upgrades [1][4] Competition Highlights - The competition included a variety of projects such as traditional Chinese pastry chefs, tea evaluators, and internet marketing specialists, demonstrating a blend of traditional skills and modern digital marketing techniques [1][4][5] - Participants in the Chinese pastry chef category showcased their skills by using natural ingredients to create pastries that blend national and international aesthetics [1][5] - The internet marketing specialist project focused on live e-commerce, testing participants' abilities in building scenarios, product promotion, and interactive reviews within a limited timeframe [4][6] Skill Development and Industry Impact - The competition aims to promote learning and practice through contests, serving as a vital platform for skill exchange and talent cultivation in the industry [8] - Judges noted a significant improvement in the overall skill level of participants, indicating that the competition's scale and quality have reached new heights [8] - This long-standing event continues to contribute to the high-quality development of Beijing's commercial service industry and the establishment of an international consumption center [8]

Core Insights - The 15th Beijing Commercial Service Skills Competition concluded successfully, featuring nearly 600 participants selected from over 10,000 initial entrants, showcasing professional skills and craftsmanship in the commercial service industry [2] - The competition focused on the theme "Skill Enhancement Improves Service Quality, Labor Creates a Better Life," aiming to promote learning, practice, and development through competition [2] - This year's 20 competition projects spanned various fields including service, technology, and trade, incorporating both traditional core projects and innovative roles aligned with digital economy and consumption upgrade trends [2] Competition Highlights - The laundry technician project included assessments on the finishing process of pure wool suits and simulated scenarios for stain removal, testing participants' mastery of washing, ironing, and maintenance techniques [2] - The internet marketing specialist project addressed the core needs of live e-commerce, where participants built live streaming scenarios, showcased products, engaged in real-time communication, and conducted in-depth reviews of sales cases, demonstrating strong job adaptability [2] - The judging team noted a significant improvement in the overall skill level of participants, with the competition becoming an important brand for showcasing skills and selecting talent in Beijing's commercial service industry [3] Future Outlook - The Beijing Commercial Service Skills Competition has been dedicated to enhancing skills and talent cultivation in the commercial service sector for 15 years, contributing to the construction of Beijing as an international consumption center and a skills-strong city [3] - The competition will continue to follow the goals of promoting learning, practice, and development through competition, supporting the high-quality development of the capital's commercial service industry [3]

Core Insights - The China-Europe Railway Express East Corridor has facilitated the import of 27.818 million tons of goods and 2,669 trains carrying 274,920 TEUs, injecting stable momentum into domestic and international supply chains [1] - The variety of imported goods, including iron ore, fertilizers, and automotive parts, has enhanced the quality of life for consumers and supported consumption upgrades in China [1] - The implementation of the "digital port" system at Manzhouli Station has improved the efficiency of cargo handling, providing 24/7 services to ensure quick processing of imported goods [1] Group 1 - The total volume of imported goods sent from Manzhouli Station has exceeded 16.25 million tons, with a year-on-year increase of 0.75% [1] - The completion of the Jiatong Railway renovation has improved transportation capacity, with 954 "point-to-point" direct trains operated, accounting for 81.3% of all trains [1] - The ongoing expansion of the Tongjiang North Station is expected to increase cargo throughput by 40%, enhancing the variety of import and export goods [1] Group 2 - Suifenhe Station has optimized the classification and handling of imported goods, ensuring a smooth process for cargo arrival, unloading, and dispatch [2]

Core Insights - The report indicates that China's economy has passed its most difficult adjustment period and is entering a new phase characterized by structural optimization and demand-driven growth, rather than a traditional V-shaped recovery [2][30] - Key indicators such as core CPI returning to 1%, narrowing PPI-CPI gap, stabilization of the real estate market, and adjustments in the labor market signal this upward trend [2][30] Group 1: Core CPI and Consumer Demand - In September 2025, China's core CPI rose by 1.0% year-on-year, marking the first time it exceeded 1% in 19 months, with a continuous increase over five months [3][5] - The CPI's month-on-month increase of 0.1% indicates a positive shift in price momentum, while the year-on-year decline of 0.3% shows a narrowing of the downward pressure [3][5] - The rise in core CPI reflects a recovery in domestic demand and enhanced consumer market dynamics [3][5] Group 2: PPI-CPI Gap and Economic Resilience - The narrowing of the PPI-CPI gap is a critical indicator of improved economic efficiency, driven by both supply and demand factors [8][9] - Supply-side policies have stabilized prices in key industries, while demand-side recovery has led to a continuous rise in core CPI [8][9] - The structural changes in the economy, including the decline in food prices, have also contributed to the narrowing of the gap [8][9] Group 3: Consumption Upgrade as an Economic Engine - The recovery in core CPI is fundamentally linked to the release of consumer potential, with a clear trend of structural upgrades in consumption rather than a broad rebound [13][15] - Policies such as the "old-for-new" consumption initiative have significantly boosted retail sales in various sectors, indicating a robust market response [15][20] - The shift from survival-oriented consumption to development-oriented consumption is evident, with a decrease in the Engel coefficient from 33% in 2012 to 29.8% in 2024 [16][27] Group 4: Real Estate and Employment Market Stabilization - The real estate market is showing signs of bottoming out, with a significant reduction in the year-on-year decline of new home sales in early 2025 [17][18] - The employment market is also stabilizing, with the urban unemployment rate declining from its peak earlier in the year, indicating a search for new equilibrium [18][19] - Structural adjustments in the labor market are evident, with policies aimed at supporting employment for key demographics [19][20] Group 5: Macroeconomic Policy Effectiveness - China's proactive macroeconomic policies in 2025, including fiscal and monetary measures, have effectively supported economic stability and growth [20][21] - The implementation of the "old-for-new" policy has been enhanced by significant financial support, reflecting a strategic approach to stimulate consumption [20][21] - Future policy directions will focus on sustaining internal demand and fostering innovation, with an emphasis on coordinated macroeconomic policies [22][27]

Core Insights - Shenzhen is rapidly emerging as a new coffee capital in China, driven by a unique blend of speed and innovation in its coffee culture [1][2][20] - The city boasts the highest density of coffee shops in the country, with 16.7 coffee shops per square kilometer in the central district [1][2] - The coffee industry in Shenzhen is characterized by a diverse range of brands, from local startups to international giants like Starbucks, indicating a robust market [2][3] Group 1: Market Dynamics - Shenzhen has 9,926 coffee-related enterprises, the highest in the nation, and a coffee shop density of 2.23 per square kilometer in core urban areas [2][3] - Local brands such as Gee Coffee Roasters and KUDDO Coffee are gaining traction alongside established international brands, showcasing a competitive landscape [2][3] - The coffee consumption journey in Shenzhen has evolved rapidly over the past 30 years, transitioning from instant coffee to specialty brews [3][4] Group 2: Consumer Behavior - The city's coffee culture emphasizes quick experiences, with long queues at grab-and-go coffee windows and events like coffee festivals attracting significant participation [3][4] - A notable 82.5% of consumers in Shenzhen drink coffee primarily for its energizing effects, indicating a strong demand for functional beverages [9] - The average age of coffee consumers in Shenzhen is 32.5 years, with a significant portion of the population being young professionals [12][19] Group 3: Innovation and Technology - Shenzhen's coffee industry is marked by innovation, with local brands exploring unique flavors and brewing techniques, such as the introduction of "fruit coffee" and "rotary steaming" technology [5][6] - The city is also becoming a hub for coffee equipment manufacturing, with local companies developing coffee machines and robots that enhance the consumer experience [7][8] - Starbucks has established its China Innovation Technology Center in Shenzhen, focusing on digital innovation and enhancing customer experiences through technology [8][20] Group 4: Future Potential - The current market size of Shenzhen's coffee industry is estimated at 476.4 billion yuan, with projections to reach 1.78 trillion yuan in the next five years [8][12] - The city's unique demographic and cultural characteristics position it well for rapid growth in coffee consumption, particularly among young, high-income professionals [12][19] - There is a growing trend towards personalized and high-quality coffee experiences, with brands adapting to meet diverse consumer preferences [11][15] Group 5: Challenges and Opportunities - Despite its rapid growth, Shenzhen's coffee culture lacks deep-rooted traditions and established national brands, which may hinder its aspirations to become a global coffee hub [17][20] - The city is actively working to cultivate a coffee culture through innovative consumer experiences and educational initiatives [17][20] - Establishing local coffee evaluation standards could further enhance Shenzhen's position in the global coffee market [18][19]

Core Points - The 34th China Chef Festival and 2025 China Culinary and Catering Expo opened in Suzhou, highlighting the importance of the event in promoting Chinese culinary culture and industry revitalization [1] - The theme of the festival is "Crafting Flavors, Building Health, Innovating Culinary Arts, New Rhythms of Suzhou," emphasizing quality and sustainability in the culinary sector [1] - The event features over a thousand competitors in seven professional competitions, more than a hundred industry elites in high-end forums, and 700 exhibitors showcasing quality products and innovative research [1] Industry Insights - The China Chef Festival is recognized as the most influential event in the country's catering industry, serving as a platform for promoting consumption upgrades and the global presence of Chinese cuisine [1] - The collaboration between the China Commercial Association and the China Culinary Association aims to enhance the value of the catering industry within China's new development framework [1] - The festival represents a convergence of culture and industry, marking a significant step towards a higher quality and more sustainable future for the Chinese catering sector [1]

Core Viewpoint - The visit to Guangzhou and Shenzhen by the Nanchang Municipal Bureau of Commerce aims to enhance foreign trade development through participation in the 138th Canton Fair and various economic and trade exchange activities, focusing on finding opportunities, learning from advanced practices, and promoting cooperation [1][4]. Group 1: Canton Fair Participation - The 138th Canton Fair is held from October 15 to November 4, covering a total exhibition area of approximately 1.55 million square meters with over 74,600 booths and more than 32,000 participating companies, marking a record high [1]. - Nanchang has 137 enterprises participating in the fair, occupying 234 booths across 28 exhibition areas, including home appliances, electronic consumer products, building materials, and clothing [1]. Group 2: Business Engagements - During the fair, the Nanchang delegation engaged with key exhibiting companies to understand their experiences with international market expansion and encouraged them to leverage the fair for global customer outreach [4]. - The delegation visited Guangzhou Trade Fair Advertising Co., aiming to strengthen collaboration and support for Nanchang's foreign trade enterprises [4]. Group 3: Economic Exchanges in Shenzhen - In Shenzhen, the delegation visited several companies, including Qianhai Ark Asset Management, recognizing its expertise in investment and inviting them to explore cooperation opportunities in Nanchang's key industries [6]. - The delegation discussed the development of cross-border e-commerce with the Shenzhen Cross-Border E-Commerce Association, focusing on industry trends and challenges to optimize Nanchang's e-commerce ecosystem [8]. Group 4: Future Initiatives - The visit is part of a broader strategy to implement "going out" and "bringing in" initiatives, with plans to organize trade matching activities at the Canton Fair and attract quality projects to boost foreign trade and consumption [9].