Investment Rating - The industry maintains a "Recommended" rating, with a focus on service consumption, beauty care, IP derivatives, and gold jewelry as new consumption sectors [6][26]. Core Insights - The report highlights that during the Spring Festival travel period, the total cross-regional population flow is expected to reach 9.5 billion people, setting a historical record. The average daily flight volume in the national civil aviation sector is projected to be 17,056 flights, showing a year-on-year increase of 0.6% compared to 2025 and an 18.4% increase compared to 2019 [4][24]. - In the beauty care sector, the top three brands on Tmall in January 2026 were L'Oreal, Proya, and Lancôme, with the total sales of the top 20 brands accounting for 28.7% of the market, reflecting an increase in market concentration [3][24]. - The report notes significant corporate activities, such as Meituan's plan to acquire Dingdong Maicai for $717 million, indicating ongoing consolidation in the retail sector [5][24]. Summary by Sections Market Performance - For the week of February 2 to February 6, 2026, the performance of the retail, social services, and beauty care sectors was -0.34%, +0.02%, and +3.69%, respectively, ranking them 19th, 17th, and 2nd among 31 primary industries [2][16]. Key Industry Events and Information - The Ministry of Commerce and nine other units issued the "2026 'Happy New Year' Spring Festival Special Activity Plan," which will run from February 15 to 23, covering various aspects of consumer experience [3][24]. - The report details the Spring Festival travel forecast, with a total expected flow of 9.5 billion people, and highlights the increase in flight operations compared to previous years [4][24]. - In the beauty care segment, significant product launches and financial recoveries were noted, such as Estée Lauder's return to profitability with a net profit of $162 million for Q2 of fiscal year 2026 [3][24]. Investment Recommendations - The report emphasizes a focus on service consumption and specific companies such as Ruoyuchen, Maogeping, Shangmei, Pop Mart, Chaohongji, and Laopu Gold as key investment targets [6][26].

Core Viewpoint - The expansion of domestic demand is a central theme in the local government work reports across 31 provinces, emphasizing the need for a strong domestic market driven by effective investment and service consumption [1][4]. Group 1: Domestic Demand Expansion - The core logic of domestic demand expansion is to achieve a virtuous cycle of "demand driving supply and supply creating demand" [1]. - The focus has shifted from relying primarily on investment and scale expansion to optimizing demand structure and upgrading drivers, emphasizing quality, sustainability, and endogenous growth of domestic demand [1][5]. - New consumption scenarios are being explored and developed to expand domestic demand growth, with a focus on innovative consumption and service expansion [1][2]. Group 2: Local Government Initiatives - Beijing aims to promote the integration of culture, commerce, tourism, and sports, creating new consumption scenarios such as leisure and fashion [2][4]. - Shanghai plans to enhance service quality and efficiency while developing 20 new integrated service consumption scenarios [2][4]. - Guangdong is focusing on expanding new consumption formats and utilizing artificial intelligence to reshape consumption platforms [2][4]. Group 3: Consumer Trends - Consumption is transitioning from a focus on physical goods to a balanced emphasis on both goods and services, with traditional consumption quality improvement and new consumption expansion being key themes [5][7]. - The "old-for-new" policy is set to become a normalized approach, with local governments expanding subsidy ranges to include various new consumer products [5][6]. - Service consumption is gaining unprecedented attention, with new service consumption areas such as elderly care and cultural tourism being prioritized [7][8]. Group 4: Investment Focus - Investment is being directed towards addressing livelihood shortfalls, upgrading industries, and enhancing infrastructure, with a focus on effective investment as a key driver for expanding domestic demand [9][10]. - Local governments are increasing investment in public services and infrastructure to support consumption and improve living standards [11][12]. - There is a notable shift in investment logic from a focus on physical assets to a balanced approach that includes human capital development [9][12]. Group 5: Emerging Industries - Investment in new infrastructure and emerging industries is being prioritized, with a focus on artificial intelligence, integrated circuits, and biotechnology [13]. - Provinces are establishing mechanisms to leverage social capital for consumption upgrade projects, creating a closed-loop chain of "investment - innovation - output - consumption" [13].

Core Viewpoint - The article highlights the changing consumer behavior in Shandong, where people are increasingly prioritizing cleanliness and service consumption as part of their New Year preparations, particularly in the context of home appliance cleaning [2][6]. Group 1: Changing Consumer Behavior - Consumers in Shandong are becoming more cleanliness-oriented, moving beyond surface cleaning to ensure thorough cleaning of kitchen appliances, including hoods and ducts [6]. - There is a noticeable shift in consumer perception regarding the cost of cleaning services; many now view spending on professional cleaning as a necessary investment for a healthy kitchen environment [6]. - The demand for cleaning services has diversified, with customers increasingly requesting comprehensive cleaning of multiple appliances, indicating a trend towards holistic home care during the New Year [6][7]. Group 2: Service Industry Insights - The service industry, particularly home appliance cleaning, has become an integral part of the New Year shopping experience for Shandong residents, reflecting a broader trend in service consumption [7]. - The article illustrates the busy schedule of service professionals, such as appliance cleaners, who experience a surge in demand leading up to the New Year, highlighting the seasonal nature of this service [3][5]. - The narrative emphasizes the satisfaction derived from customer interactions and the positive impact of service work on both the service provider's livelihood and the customers' festive experiences [5][7].

Group 1 - The core viewpoint of the articles highlights the vibrant and evolving nature of the Chinese New Year goods market, showcasing a strong demand and supply dynamic that supports consumption upgrades and cultural integration [1][4] - The integration of online and offline channels is a prominent feature of the New Year goods market upgrade, with initiatives like the "2026 National Online New Year Goods Festival" enhancing consumer experience through cultural elements and digital engagement [1][2] - The government is actively supporting consumption through policies such as the 625 billion yuan special bonds for consumer goods exchange programs, which aim to stimulate demand in high-quality sectors like energy-efficient appliances and new energy vehicles [2][4] Group 2 - There is a noticeable shift in consumer preferences towards high-quality products, with increased demand for energy-efficient appliances and organic products, reflecting a growing health consciousness among consumers [3][4] - Service consumption is becoming increasingly popular during the New Year, with experiences such as travel and cinema gaining traction, indicating a transition from basic needs to quality experiences [2][3] - The market conditions for consumption in 2026 are robust, with a projected retail sales total exceeding 50 trillion yuan by 2025, and consumption contributing 52% to economic growth, highlighting significant untapped potential [4]

Core Insights - The article discusses the increasing significance of service consumption in China, highlighting that by 2025, per capita service consumption expenditure will account for 46.1% of per capita consumption expenditure, indicating a need for quality upgrades in service consumption [1] Group 1: Changes in Supply and Demand - The demand for services is characterized by diversification, personalization, and quality, which drives supply innovation [1] - The supply side is innovating under policy guidance and technological empowerment, leading to new business models and enriched content in areas like cruise economy, inbound tourism, and winter sports consumption [1] - Service consumption is transitioning from a focus on goods to a balanced emphasis on both goods and services [1] Group 2: Key Areas of Service Consumption - Key service consumption areas include essential services like elderly care, childcare, and domestic services, which are in high demand [2] - Potential growth areas such as tourism, wellness, and entertainment are rapidly developing, especially during the nine-day Spring Festival holiday [2] - The nine key service areas identified by the State Council are crucial for service consumption and economic development, expected to become new growth points in the service economy [2] Group 3: Integration of Service Consumption and Livelihood - Service consumption in areas like elderly care, childcare, and domestic services is closely linked to daily life and is foundational to the service sector [4] - Policies should support and guide these sectors to expand supply while ensuring quality, which can stimulate enterprise engagement [4] - Companies can leverage big data to better understand consumer needs and provide more precise services [4]

Core Viewpoint - In 2025, China's economy demonstrated strong resilience with a GDP growth rate of 5%, achieving major expected targets despite a complex external environment. However, the "asymmetric recovery" highlighted concentrated growth engines and the need for enhanced internal momentum [2][3]. Economic Performance in 2025 - China's GDP growth of 5% remains significantly higher than the global average, with the World Bank projecting a global growth of 2.7% for 2025. Developed economies are expected to grow at 1.7%, while developing countries (excluding China) are projected to grow at 3.7% [3]. - A notable structural highlight is the increase in per capita GDP, estimated to reach approximately $13,900, nearing the World Bank's high-income country threshold [3]. - Growth drivers in 2025 were primarily concentrated in exports and equipment upgrades, with exports increasing by 5.5% year-on-year and investment in equipment and tools rising by 11.8% [3]. Transition to Balanced Growth in 2026 - The economic growth model is expected to shift from a "two-wheel drive" (focused on exports and equipment upgrades) to a "four-wheel drive" in 2026, indicating a more balanced growth structure [4]. - Key areas for policy focus include fixed asset investment, service consumption, real estate, and traditional manufacturing, aimed at addressing existing shortfalls in these sectors [5][6]. Key Policy Observation Windows - Investors should monitor three critical time points in 2026: 1. Early March during the National People's Congress, where economic growth targets and major policy allocations will be set [8]. 2. Mid to late March, when local investment conditions will become clearer, particularly in the industrial and construction sectors [8]. 3. The second quarter, which will be crucial for observing consumer behavior and the effectiveness of consumption policies [8]. Focus on Service Consumption - Service consumption is identified as a key area for growth, with potential policy support in five directions: 1. Fiscal resources directed towards service consumption [9]. 2. Implementation of paid staggered vacations to enhance service consumption experiences [10]. 3. Expansion of inbound consumption, with significant potential for growth [10]. 4. Utilization of new technologies, such as AI, to create innovative service consumption scenarios [10]. 5. Improvement of income levels through pension reforms, which could boost service consumption [10]. Mid-term Growth Opportunities - Key mid-term opportunities include: 1. Accelerated industrialization in Southern countries, with increasing demand for Chinese exports [11]. 2. The second wave of globalization for Chinese enterprises, focusing on overseas capacity [11]. 3. The application of AI in various sectors, presenting significant growth potential [11]. 4. Increased consumption rates, with room for improvement in the consumption-to-GDP ratio [12]. Investment Logic Shift - The A-share market is expected to transition from a "pricing expectation" phase to a "pricing fundamental" phase in 2026, indicating a shift from valuation-driven to earnings-driven market dynamics [13][14]. - Improvement in corporate profitability is linked to the recovery of the Producer Price Index (PPI), with projections suggesting a potential increase in industrial enterprise profit growth to 6%-7% if PPI growth rebounds to -0.6% [15]. Global Narrative Changes - The global investment landscape is influenced by five major narratives, including the weakening of dollar credit and the reshaping of global supply chains. However, signs of a shift in these narratives may impact asset performance in 2026 [16][17]. Overall Asset Allocation Strategy - The overarching investment strategy for 2026 is characterized by a focus on stability and progress, aligning with the central economic work conference's emphasis on "stability while seeking progress" [18].

Investment Rating - Industry rating: Recommended [3] Core Insights - The report highlights the strong performance of Pop Mart, with over 1 billion LABUBU sales and 4 billion total product sales in 2025, indicating robust growth potential in the emotional consumption sector [1] - The Spring Festival travel volume is expected to reach 10.68 billion trips in 2026, a significant increase of 11.7% compared to 9.56 billion trips in 2025, reflecting strong consumer demand for travel [2] - The report suggests focusing on high-growth sectors supported by policy and technology, including service consumption, new consumption trends, retail innovation, and AI applications [2][56] Summary by Sections Industry & Company Dynamics - Pop Mart's annual meeting showcased its achievements, including a global employee count exceeding 10,000 and a registered membership surpassing 100 million [1] - Anta Group's acquisition of Puma is a strategic move to enhance its global presence and compete with major brands like Nike and Adidas [15][16] - The opening of JD Seven Fresh stores in Beijing and Shanghai aims to capture the New Year market with a focus on fresh produce and high-quality consumer experiences [17] Macro & Industry Data - In November, retail sales grew by 1.3% year-on-year, with a notable increase in online retail sales, which accounted for 25.9% of total retail sales [31][41] - The gold consumption in Q3 2025 saw a decline of 18.56%, with jewelry sales dropping significantly, while demand for gold bars remained strong [48][49] Investment Recommendations - The report recommends focusing on sectors with high growth potential, including service consumption, new consumption trends, and retail innovation, with specific beneficiary companies listed [2][56]

Group 1: Company Overview - China Oriental Education (00667) has a strong recovery in mature professional enrollment and profitability, with emerging programs steadily being developed to create new growth momentum [1] - The company is a leading vocational education group in China, with well-known brands such as New Oriental Cooking, Xinhua Computer, and Wantong Automotive Repair, covering four mature fields: culinary arts, western cuisine, information technology, and automotive services [1] Group 2: Financial Projections - The company is expected to achieve a net profit attributable to shareholders of 790 million, 1.1 billion, and 1.38 billion yuan for the years 2025-2027, reflecting growth rates of 53%, 39%, and 26% respectively [1] - The reasonable valuation for the company is estimated to be between 6.89 and 7.95 HKD per share, maintaining an "outperform" rating [1] Group 3: Industry Trends - The vocational education industry in China is in a golden expansion phase, with a projected compound annual growth rate of 17% from 2025 to 2029, potentially exceeding 2 trillion yuan by 2029 [2] - The adjustment in the secondary vocational education sector has seen a decline in high school enrollment from 51% to 34% from 2010 to 2024, but there is a potential for a new balance as skilled talent demand remains strong [2] Group 4: Mature Programs - The company's proactive adjustments since 2024, including shutting down inefficient campuses and enhancing course structures, have led to a net profit margin of 19.0% in the first half of 2025, an increase of 5.0 percentage points [3] - The recovery in mature program enrollment has resulted in a 7% year-on-year increase in new training participants, with expectations of maintaining a 7-8% growth rate in new enrollments for 2026-2027 [3] Group 5: Emerging Programs - The beauty industry is projected to reach a market size of 380 billion yuan by 2025, with characteristics similar to the culinary sector, indicating potential for replicating past successes [4] - The company’s beauty brand achieved an average of 6,000 training participants in the first half of 2025, surpassing the total for 2024, with expectations for beauty revenue to reach 700 million yuan by 2027 [4] - The pet and wellness sectors are also identified as high-potential areas for long-term growth, with pilot programs already underway in the pet education field [4]

Group 1 - The State Council will hold a press conference regarding the "Accelerating the Cultivation of New Growth Points in Service Consumption Work Plan" on February 6 at 3 PM [1] Group 2 - On February 6, a total of 7 companies will have their restricted shares unlocked, with a total unlock volume of 33.61 million shares, amounting to a market value of 5.243 billion yuan [2] - The companies with the highest unlock volumes are Xinghuan Technology-U, Dengkang Dental, and Hansan Technology, with unlock shares of 27.16 million, 2.99 million, and 1.52 million respectively [2] - In terms of unlock market value, Xinghuan Technology-U, Dengkang Dental, and Hansan Technology lead with values of 4.985 billion yuan, 130 million yuan, and 8.616 million yuan respectively [2] Group 3 - Eight companies disclosed stock repurchase progress on February 6, with 2 companies announcing new repurchase plans, 2 companies having their plans approved by shareholders, and 4 companies completing their repurchase plans [3] - The newly announced repurchase plans include Haizheng Pharmaceutical and Huatong Cable, with intended repurchase amounts of up to 726,400 yuan and 296,800 yuan respectively [3] - The companies that received shareholder approval for their repurchase plans are Hengtong Co. and Hongtai Sun, with intended repurchase amounts of up to 100 million yuan and 215,000 yuan respectively [3]

Group 1 - The core viewpoint of the report is that China Oriental Education (00667) is experiencing a strong recovery in its mature professional enrollment and profitability, while steadily expanding into emerging fields, which is expected to create new growth momentum [1] - The company is a leading vocational education group in China, with a diverse portfolio including well-known brands such as New Oriental Cooking, Xinhua Computer, and Wantong Automotive Repair, and has been operating in the vocational education sector for nearly 40 years [1] - The company is projected to achieve net profits of 790 million, 1.1 billion, and 1.38 billion yuan for the years 2025-2027, reflecting growth rates of 53%, 39%, and 26% respectively [1] Group 2 - The vocational education industry in China is in a golden expansion phase, with a projected compound annual growth rate of 17% from 2025 to 2029, potentially exceeding 2 trillion yuan by 2029 [2] - The company has actively adjusted its operations since 2024, including shutting down inefficient campuses and upgrading course structures, which has led to an increase in net profit margin to 19% in the first half of 2025, with expectations of approaching 24% [3] - Emerging fields such as beauty, pet care, and health management are expected to become new growth drivers, with the beauty market projected to reach 380 billion yuan by 2025 [4]