Investment Rating - The industry is rated as outperforming the market, with an expected relative increase of over 10% in the next six months [47]. Core Insights - In January-February 2025, China's total retail sales of consumer goods reached 837.31 billion yuan, showing a year-on-year growth of 4.0%, which is an increase of 0.3 percentage points compared to December 2024 [2][15]. - The growth in retail sales is attributed to the recovery in consumer demand, particularly in cultural, sports, and communication equipment sectors, likely driven by increased travel and entertainment activities around the Spring Festival [4][41]. Summary by Sections Overall Performance - The total retail sales of consumer goods in January-February 2025 increased by 4.0% year-on-year, with a total of 837.31 billion yuan, marking a recovery from the previous month [2][15]. - Retail sales in urban areas grew by 3.8%, while rural areas saw a higher growth of 4.6% [18]. Segment Analysis - Essential consumer goods showed steady growth, with notable increases in categories such as food and daily necessities. For instance, the food category grew by 11.5% and daily necessities by 5.7% [20][21]. - Among discretionary items, categories like cosmetics (+4.4%), cultural office supplies (+21.8%), and sports entertainment (+25.0%) exhibited significant growth, while beverages saw a decline of 2.6% [23][24]. Online Retail Performance - Online retail sales reached 227.63 billion yuan in January-February 2025, reflecting a year-on-year increase of 7.3%, accounting for 27.19% of total retail sales [4][38]. - The physical goods online retail sales amounted to 186.33 billion yuan, with food items growing by 10.8% [38][40]. Investment Recommendations - The report suggests focusing on sectors such as food and beverage, particularly the liquor industry, which is expected to recover due to increased demand from weddings and celebrations [42]. - In the retail sector, attention is drawn to gold and jewelry, which are expected to benefit from rising gold prices and consumer willingness to pay for quality craftsmanship [43]. - The cosmetics sector is highlighted for its strong growth potential, particularly for domestic brands that are gaining market share [44].

Investment Rating - The report maintains a "Recommended" investment rating for the building materials industry [1]. Core Insights - The government work report emphasizes the need to expand domestic demand through both consumption and investment, which is expected to drive building materials demand [3]. - Key projects will be accelerated with a proposed central budget investment of 735 billion yuan for 2025, alongside measures to simplify investment approval processes [3]. - The report highlights the importance of revitalizing the real estate market by controlling new land supply and promoting the acquisition of existing properties, which is anticipated to boost demand for consumer building materials [3]. - The fiscal policy support is set to increase, with a deficit rate raised to 4% and a total deficit scale of 5.66 trillion yuan, aimed at accelerating major project construction and reducing inventory of existing properties [3]. - The report notes that the green and low-carbon transition in the building materials industry will stabilize supply and demand, with a focus on high-performance cement enterprises benefiting from stricter emissions regulations [4]. Summary by Sections Demand Drivers - The government aims to stimulate demand through consumption incentives, such as a 300 billion yuan special bond for consumer goods replacement programs [3]. - The real estate sector is transitioning to a focus on existing inventory, with policies expected to lower purchasing barriers and enhance housing demand [3]. Supply Side Dynamics - The report anticipates that the green transition will lead to the elimination of outdated production capacities, thereby increasing industry concentration and stability [4]. - Cement companies with high ratings for low emissions are expected to gain competitive advantages, influencing their cost structures and profitability [4]. Investment Recommendations - The report recommends leading consumer building material companies such as Beixin Building Materials, Weixing New Materials, Dongfang Yuhong, and Gongyuan Co., which have strong product quality and brand advantages [5]. - It also suggests regional cement leaders like Huaxin Cement and Shangfeng Cement for potential profit recovery amid stricter capacity controls and rising price expectations [5].

Core Viewpoint - The article emphasizes three clear policy directions: stimulating technological innovation, implementing supply-side reforms to eliminate "involution" competition, and expanding domestic demand, which are expected to restore market confidence and lead to a resurgence of core assets in the A-share market [1][2]. Group 1: Economic Goals and Policy Directions - The 2025 government work report sets a GDP growth target of around 5.0%, a deficit ratio of 4%, and a total scale of special bonds close to 2 trillion, aligning with market expectations and previous central economic meetings [2]. - Structural and industrial policy highlights include a focus on digital economy vitality and the cultivation of emerging industries [2]. Group 2: Technological Innovation - The report mentions the promotion of "Artificial Intelligence+" initiatives, supporting the widespread application of large models, and the development of smart terminals and manufacturing equipment [3]. - Future industries such as biomanufacturing, quantum technology, and 6G are identified for investment growth [3]. Group 3: Supply-Side Reforms - The government aims to reduce energy consumption per unit of GDP by 3% and combat "involution" competition through policies like carbon constraints, procurement standards, and encouraging mergers and acquisitions [4]. - The focus is on enhancing product quality and eliminating outdated production capacity [4]. Group 4: Demand-Side Expansion - Key measures for boosting consumption include increasing household income through subsidies and improving the social security system [5]. - The government plans to support consumption through special bonds and stabilize the stock and real estate markets to maintain wealth effects [6]. Group 5: Investment Opportunities - The article identifies "new core assets" in the A-share market, focusing on sectors driven by technological innovation, supply-side reforms, and demand-side recovery [7]. - Specific areas of interest include domestic computing power, edge AI, high-energy-density energy carriers, and innovative pharmaceuticals [7]. - The supply-side focus will likely lead to a return of profits to quality production capacities, particularly in aluminum, steel, and panel industries [7].

Core Insights - The report highlights a positive outlook for domestic PMI data, suggesting a favorable direction for asset allocation while monitoring variables related to US Treasury rates [5][6][9] - It emphasizes the seasonal recovery in February PMI, indicating a need to pay attention to the incremental policies from the upcoming Two Sessions [5][13] - The investment strategy for March includes a focus on key stocks, with a particular emphasis on sectors benefiting from domestic demand expansion and technological advancements [5][18] Group 1: Domestic PMI Data and Economic Indicators - The manufacturing PMI for February is reported at 50.2, an increase of 1.1 percentage points from the previous month, indicating a significant recovery in manufacturing activity [8][13] - The non-manufacturing PMI stands at 50.4, slightly above market expectations, reflecting a stable recovery in the service sector [8][13] - The report suggests that the recovery in PMI is influenced by the post-Spring Festival resumption of activities and government stimulus measures, with production and new orders showing growth [8][14] Group 2: Market Performance and Asset Allocation - The report notes a general decline in global equity markets during the last week of February, with A-shares experiencing adjustments while US and European markets showed mixed results [7][8] - It highlights a decrease in commodity prices, including oil and metals, alongside a rebound in the US dollar index [7][8] - The report recommends focusing on sectors with strong downstream recovery and competitive cost structures, particularly in non-ferrous metals and petrochemical industries [8][9] Group 3: Policy and Economic Outlook - The report discusses the government's focus on expanding domestic demand and technological innovation as key tasks for the upcoming Two Sessions, with GDP growth targets expected around 5% [18][25] - It mentions the potential for increased fiscal deficits and the expansion of special bonds to support economic growth [18][25] - The report also addresses the impact of external uncertainties, particularly related to US trade policies and their potential effects on China's export outlook [18][19]

赵伟 申万宏源证券首席经济学家 贾东旭 高级宏观分析师 侯倩楠 宏观分析师 联系人： 贾东旭 摘要 事件： 2025年3月5日，国务院总理李强代表国务院，向十四届全国人大三次会议作政府工作报告。 一、主要经济目标设定更务实，相关指标设计讨论充分 主要经济目标设定更加"务实"，对相关指标设计讨论充分。 2025年经济增长预期目标为5%左右，"既是 稳就业、防风险、惠民生的需要，也有经济增长潜力和有利条件支撑"；报告也提出"实现这些目标很不 容易，必须付出艰苦努力"。基于5%左右的经济增长目标，政策部署更加灵活，报告指出将"根据形势变 化动态调整政策，提高宏观调控的前瞻性、针对性、有效性"，执行层面注重"加强上下联动、横向协 作"。 对可能遇到的困难与挑战，报告表述清醒客观，特别提及关税、内需和执行层面问题。 报告指出"多边贸 易体制受阻，关税壁垒增多"等问题。内部发展方面，报告梳理三大矛盾：需求端"有效需求不足"的结构 性问题，供给端 "部分企业生产经营困难，账款拖欠问题仍较突出"，民生领域"群众就业增收面临压 力"等。同时，报告特别提及"一些地方基层财政困难"，也直指"一些工作协调配合不够，有的政策落地偏 慢 ...

Core Viewpoint - The government work report emphasizes a stable yet progressive economic approach, maintaining a GDP growth target of around 5% and a budget deficit target of approximately 4%, indicating a proactive fiscal policy and a moderately loose monetary policy aimed at promoting the healthy development of the real estate and stock markets [2][3]. Group 1: Economic Policy - The fiscal policy is set to be more aggressive, with a total new government debt scale of 11.86 trillion yuan, an increase of 2.9 trillion yuan from the previous year [2]. - The monetary policy will focus on optimizing tools to support the real estate and stock markets [2]. - The budget deficit target of around 4% is a record high, with specific allocations for long-term special bonds and local special bonds being raised [2]. Group 2: Domestic Demand Expansion - The primary task for 2025 is to expand domestic demand, particularly addressing the consumption shortfall [2]. - Key measures include issuing 300 billion yuan in ultra-long special bonds for "old-for-new" exchanges and promoting new types of consumption in digital, green, and intelligent sectors [2]. Group 3: Technological Development - The focus on new productive forces emphasizes the digital economy and advanced manufacturing, with new industry priorities including biomanufacturing, quantum technology, embodied intelligence, and 6G [3]. - The report highlights the importance of digital transformation and the cultivation of digital service providers [3]. Group 4: Capital Market Reform - The report outlines reforms aimed at increasing medium- and long-term capital inflows into the market, along with optimizing IPO and merger and acquisition processes [3]. Group 5: Real Estate Policy - New measures in real estate include reducing restrictive policies and granting local authorities greater autonomy in managing existing housing stock [3]. Group 6: Population and Social Policies - The report addresses community-based elderly care and mentions the introduction of childcare subsidies [4]. Group 7: State-Owned Enterprise Reform - The establishment of a strategic mission evaluation system for state-owned enterprises is highlighted [5].

Core Viewpoint - The upcoming National Two Sessions in 2025 are expected to bring significant opportunities in the capital market, with analysts expressing optimism about China's asset attractiveness and focusing on economic growth targets, fiscal policy, and monetary policy [1] Macroeconomic Focus - Economic Growth: Most institutions predict a GDP growth target of around 5% for 2025, with a weighted average growth target calculated at 5.3% based on local targets [2] - Inflation Target: CPI targets are expected to be lowered to around 2% for 2025, down from previous years' targets of approximately 3% [3] Fiscal Policy Focus - Deficit Rate: Analysts anticipate an increase in the deficit rate to around 4% for 2025, with new special bond issuance expected to rise to approximately 4.2 to 4.5 trillion yuan [3] - Spending Direction: Fiscal policy is expected to focus on promoting consumption and driving technological innovation, with measures such as supporting trade-in programs to boost consumer spending [4] Monetary Policy Focus - Monetary Policy Stance: The prevailing view is that monetary policy will maintain a "moderately loose" stance, with potential for interest rate cuts and reserve requirement ratio reductions, but these actions may be delayed until after the Two Sessions [5][6] Capital Market Investment Opportunities - Technology Sector: The technology growth sector, particularly around AI and robotics, is expected to remain a hotspot, with increasing attractiveness of Chinese AI assets [6] - Consumer Sector: With enhanced fiscal policy efforts, consumer growth is anticipated to accelerate, supported by government measures like vehicle purchase subsidies [7] - Capital Market Reforms: The Two Sessions may lead to further improvements in the capital market's "1+N" institutional framework, promoting mergers and acquisitions and fostering a healthy market environment [8]