Investment Rating - The report maintains a "Recommended" investment rating for the optional consumption industry [6] Core Insights - The report highlights a focus on performance realization and improvement in market conditions as annual reports are being disclosed [2] - The optional consumption sector has shown varied performance, with specific segments like tourism benefiting from the Qingming holiday, while others like education and professional chains have seen declines [12][14] Summary by Sections Market Performance - For the week of March 24-28, 2025, the performance of the Shenwan retail, social services, and beauty care sectors was -2.05%, -1.96%, and -1.64% respectively, ranking them 23rd, 20th, and 16th among 31 primary industries [12][14] - The Shanghai Composite Index decreased by 0.40%, while the Shenzhen Component Index fell by 0.75%, and the CSI 300 Index remained flat at +0.01% [12] Key Events and Announcements - Beauty Care: - Juzhibio reported a revenue of 5.539 billion yuan in 2024, up 57.2% year-on-year, with a net profit of 2.152 billion yuan, a 46.5% increase [21] - Kefu Mei achieved a revenue of 4.54 billion yuan, growing 62.9% year-on-year [21] - Maogeping's revenue reached 3.885 billion yuan, a 34.6% increase, with a gross margin of 84.4% [21] - Retail: - Pop Mart's revenue surpassed 10 billion yuan for the first time in 2024, with a year-on-year growth of 106.9% [20] - Chinagoods platform registered over 4.8 million buyers, and Yiwu International Trade City saw a 12.15% increase in daily foot traffic [22] - Social Services: - Meixue Ice City reported a revenue of 24.829 billion yuan, up 22.3% year-on-year, with a net profit of 4.454 billion yuan, a 39.8% increase [24] - Bawang Tea Ji submitted an IPO application, reporting a GMV of 29.5 billion yuan and revenue of 12.405 billion yuan in 2024 [25]

Core Viewpoint - The A-share market is experiencing fluctuations, with the Hong Kong stock market facing significant declines, particularly in the technology sector, leading to a potential style switch in investment focus [1][3][8]. Market Performance - The A-share market saw a trading volume of less than 1.3 trillion, with sectors like coal, electricity, and banking showing strength, while semiconductor, communication, and automotive sectors faced collective adjustments [2][8]. - The Hong Kong stock market, particularly the Hang Seng Technology Index, dropped over 3%, with Xiaomi's stock falling more than 6%, indicating a significant impact on market sentiment [3][6]. Fund Flows - Despite the market's downturn, over 11 billion was invested in stock ETFs over two trading days, indicating that funds are taking advantage of the market correction [12][14]. - The inflow of funds was particularly notable in ETFs tracking the Sci-Tech 50, A500 index, and sectors like healthcare and artificial intelligence [14][15]. Sector Analysis - The technology sector's decline is attributed to external factors, including volatility in overseas markets, particularly among U.S. tech giants, which has led to a contraction in risk appetite [8][18]. - Analysts suggest that as the market approaches the earnings reporting season, there will be a greater focus on performance verification, leading to a potential shift towards sectors with stronger earnings certainty, such as consumer goods and pharmaceuticals [8][17]. Investment Strategy - The current market environment suggests a rotation towards sectors that are undervalued and have potential policy catalysts, with a focus on banking, insurance, and consumer sectors like healthcare and home appliances [20][21]. - Historical data indicates that the consumer sector tends to perform well in the second quarter, with specific industries like food and beverage, home appliances, and automotive showing strong average gains [17][18].