Investment Rating - The investment rating for the retail industry is "Outperform the Market" (maintained) [3][17]. Core Viewpoints - In July 2025, the total retail sales of consumer goods reached 38,780 billion, with a year-on-year growth of 3.7%. Excluding automobiles, the growth was 4.3% [4][5]. - The growth trend in retail sales continues, with goods retail growing by 4% and catering income increasing by 1.1% in July [4][5]. - For the first seven months of 2025, the total retail sales amounted to 284,238 billion, reflecting a growth of 4.8% [5]. Summary by Relevant Sections Retail Sales Performance - In July 2025, essential goods maintained steady growth, with categories such as grain and oil, tobacco and alcohol, and daily necessities growing by 8.6%, 2.7%, and 8.2% respectively. In the optional category, cosmetics, gold and jewelry, and clothing grew by 4.5%, 8.2%, and 1.8% respectively [4][8]. - The online retail sales for the first seven months of 2025 increased by 9.2%, with physical goods online retail sales growing by 6.3%, accounting for 24.9% of total retail sales [8]. Future Outlook and Investment Suggestions - The report anticipates that domestic policies focusing on stimulating consumption and countering supply-side issues will create a favorable environment for future consumption recovery [4][11]. - Recommendations for long-term investment opportunities include: 1. Cross-border expansion: With improving external trade conditions, companies like Xiaogoods City, Focus Technology, and Anker Innovation are highlighted [4][11]. 2. Gold and jewelry: Companies such as Chao Hong Ji, Chow Tai Fook, and Cai Bai Co. are expected to benefit from high gold prices and consumer demand [4][11]. 3. Beauty and personal care: Brands like Shiseido, Dengkang Oral Care, and Shanghai Jahwa are positioned to gain market share due to domestic product replacement [4][11]. 4. Traditional retail: Companies like Chongqing Department Store and Miniso are noted for their potential in improving performance and being undervalued [4][13].

Fixed Income - The bank wealth management market's existing scale reached 30.67 trillion yuan as of H1 2025, an increase of 0.72 trillion yuan compared to the end of 2024, surpassing the average change of -0.13 trillion yuan from H1 2021 to H1 2024 [2][7][8] - The average annualized yield of wealth management products weakened in H1 2025, with an average yield of 2.12%, down 0.53 percentage points from the entire year of 2024 [9][10] - The market is expected to stabilize above 30 trillion yuan in H2 2025, with a focus on long-term municipal investment bonds and capital bonds [10] New Consumption - Maternal and Infant Industry - The implementation of the childcare subsidy policy is expected to stimulate the maternal and infant industry, with the market size projected to reach 76,299 billion yuan in 2024 and 89,149 billion yuan by 2027 [12][13] - The birth population in China is expected to increase to 9.54 million in 2024, marking a rise of 520,000 from 2023, the first increase since 2017 [13] - The policy aims to alleviate family burdens and enhance birth rates, benefiting sectors such as dairy products, education and training, and infant care [13] New Consumption - Investment Opportunities - The high-end beauty sector is expected to grow faster than the mass market, with projected CAGR of 9.6% for skincare and 10.8% for makeup from 2023 to 2028 [14][15] - The ancient gold market shows strong growth potential, with a CAGR of 21.8% expected from 2023 to 2028 [15][16] - The current beverage market is seeing a rise in ready-to-drink products, with the market size for ready-to-drink beverages reaching 5,175 billion yuan in 2023, accounting for 36.3% of the beverage market [16][17] Medical Devices - Kaili Medical - Kaili Medical is positioned as a leader in ultrasound and endoscopy equipment, with new product launches expected to enhance market penetration [19][20] - The company has expanded its workforce significantly, preparing for a recovery in the medical device sector, with procurement activities showing signs of normalization [20][21] - Revenue forecasts for Kaili Medical indicate a growth trajectory, with expected revenues of 2.388 billion yuan in 2025, growing to 3.224 billion yuan by 2027 [21] Transportation - YTO Express - YTO Express reported a revenue of 5.53 billion yuan in June 2025, reflecting a year-on-year increase of 11.35%, with a business volume growth of 19.34% [23][24] - The express delivery market is experiencing structural growth, with YTO's business volume growth outpacing overall market growth [24][25] - The "anti-involution" policy is expected to improve profitability in the express delivery sector, with YTO's net profit per ticket projected to increase significantly [25][26]

Core Insights - The report maintains an "outperform" rating for the retail sector, anticipating that easing international conditions and domestic policy stimulus will positively influence the sector's performance [3][42]. - The overall retail sales in May 2025 reached 4.13 trillion, growing by 6.4% year-on-year, with goods retail sales increasing by 6.5% [11][14]. Beauty and Personal Care - In May 2025, the cosmetics retail sales grew by 4.4%, with high online penetration leading to diminishing promotional effects. However, leading domestic brands are expected to outperform the market due to the trend of domestic product substitution [11][12]. - The competitive landscape is intensifying, with rising sales expense ratios expected to pressure profit margins for some brands, although top players with strong product innovation may still achieve robust growth [11][12]. Gold and Jewelry - The gold and jewelry sector saw a significant year-on-year growth of 21.8% in May 2025, benefiting from a low base effect from the previous year. Products that appeal to younger consumers are expected to drive higher growth rates [11][12]. Supermarkets and Department Stores - From January to May 2025, department store sales slightly increased by 1.3%, while supermarket sales grew by 5.7%. Companies that adapt to the current value-for-money consumption trend through supply chain upgrades are expected to perform better [12][14]. Cross-Border E-commerce - The second quarter is expected to face short-term performance pressures due to external environmental challenges. However, leading platform companies are anticipated to demonstrate strong resilience in the medium to long term due to flexible tariff responses and solid product capabilities [12][14]. Investment Recommendations - The report recommends several companies across different sectors, including: - Beauty and Personal Care: Recommended companies include 毛戈平, 丸美生物, and 登康口腔, which are expected to benefit from domestic product substitution and channel optimization [3][42]. - Gold and Jewelry: Companies like 老铺黄金 and 潮宏基 are highlighted for their potential to achieve accelerated growth due to favorable market conditions [3][42]. - Cross-Border E-commerce: Recommended companies include 小商品城 and 安克创新, which are positioned to capitalize on improving trade conditions [3][42]. - Retail: Companies such as 名创优品 and 重庆百货 are suggested for their low valuation and potential for improvement [3][42].

Summary of Conference Call Records Industry Overview - The beauty and personal care industry has shown a recovery in Q1, with domestic brands gaining market share, particularly through category and channel breakthroughs. Companies like Luoyuchen and Jiahua have improved margins through organizational adjustments and product innovation [1][4] - The personal care market is experiencing stable growth with a trend towards premiumization. Domestic brands are gaining an advantage in emerging channels like Douyin, with strong revenue growth and consumer recognition of their market share increase [1][5] - Live-streaming e-commerce has provided domestic beauty and personal care brands with opportunities to effectively reach young consumers, enhancing brand awareness and sales channels [1][6] Key Companies and Performance - **Mao Geping**: Achieved significant growth above industry averages, expected to maintain a 30% compound annual growth rate (CAGR) over the next three years due to high-end offline channels and effective online marketing [1][9] - **Ruo Yuchen**: Experienced rapid sales growth through product design and marketing innovation, particularly in the fragrance laundry liquid and health products sectors, with a sales target of 1 billion yuan for 2025 [1][9] - **Baiya and Dengkang**: Both companies have shown good revenue growth, with Baiya leveraging live-streaming e-commerce for expansion and Dengkang focusing on high-end products through targeted marketing on platforms like Douyin [1][10][11] Market Trends and Consumer Behavior - The demand for personal care products is stable but has shown a consistent price increase trend, driven by inflation and a shift towards health and natural product preferences among consumers [1][5] - The beauty industry is characterized by a long-term growth potential, with domestic brands continuing to gain market share. Current valuations have not yet returned to pre-2021 levels, indicating potential for valuation improvement [1][14] Future Growth Potential - The sanitary napkin market has reached a certain ceiling in domestic sales, but there is still room for growth in absorbent products like diapers and adult care items, as well as potential expansion into overseas markets [1][17] - The toothpaste market is also large, with opportunities for growth in related categories such as toothbrushes and mouthwash, indicating a robust growth outlook for the oral care sector [1][18] - The cotton soft towel market, as a new product category, has significant market potential due to its higher price point compared to traditional paper products, with companies like Weijian Medical expanding their product lines to enhance brand presence [1][19] Valuation Insights - Most personal care brands have not yet experienced the valuation premiums seen in 2021, with current valuations aligning with growth rates. However, as domestic brands continue to validate their growth, there is potential for increased valuation premiums in the future [1][20][21] - In the Hong Kong market, companies like Shangmei have a valuation of approximately 24 times earnings, while in the A-share market, Pulaoya's valuation is around 20 times, both indicating investment attractiveness [1][15]

Summary of Key Points from Conference Call Records Industry Overview - The conference call discusses the new consumption sectors, specifically focusing on the beauty and trendy toy industries, highlighting the impact of Generation Z on consumer behavior and market dynamics [1][2][3]. Core Insights and Arguments Beauty Industry - The beauty industry is benefiting from the logic of domestic product substitution, with domestic brands continuously increasing their market share, particularly in the mid-to-high-end market [1][2][5]. - The market for skincare products, especially eye and facial care, is growing significantly faster than the overall market, driven by emerging functional ingredients like recombinant collagen and signaling molecules [1][15]. - The beauty sector is experiencing a shift from traditional e-commerce to content-driven e-commerce, necessitating changes in marketing strategies and organizational structures to adapt to a "product finds people" model [1][3][4]. - The impact of the US-China tariff war has made domestic beauty products more attractive, with over 10 billion yuan worth of beauty products imported from the US facing tariffs, enhancing the competitiveness of local brands [2][5]. - Companies like Proya, Betaini, and Perfect Diary are expected to show strong performance despite facing profit pressures, indicating overall strengthening competitiveness in the sector [2][5]. Trendy Toy Industry - The trendy toy industry is heavily reliant on IP (intellectual property) comprehensive operation capabilities rather than manufacturing, with leading companies maintaining competitive advantages through design and supply chain innovations [1][30][31]. - The market for trendy toys is rapidly growing, with a 30% year-on-year increase in the domestic pan-entertainment toy market, expected to maintain a compound annual growth rate of 14% over the next five years [31]. - Companies like Pop Mart are expanding their market presence in Southeast Asia and the US, with revenue growth expected to exceed market expectations [1][30][40]. Additional Important Insights - The beauty industry is transitioning from an incremental market logic to a stock market logic, with new business models and companies emerging [5][6]. - The rise of Generation Z as a primary consumer group is driving demand for products that emphasize emotional and personal expression, leading to structural opportunities in niche markets like trendy toys and beauty care [1][3][8]. - The beauty sector is seeing a shift towards personalized marketing and decentralized promotion strategies, reflecting changes in consumer preferences and shopping behaviors [4][11]. - The competitive landscape in the trendy toy sector is evolving, with leading brands like Pop Mart and others leveraging their IP capabilities to capture market share from smaller players [30][35][36]. Conclusion - The beauty and trendy toy industries are undergoing significant transformations driven by changing consumer preferences, competitive dynamics, and macroeconomic factors. The focus on domestic brands, innovative marketing strategies, and IP management will be crucial for companies looking to capitalize on these trends in the coming years [1][5][30][31].

Core Viewpoint - The article discusses the strong rebound of domestic brands in sectors such as consumer goods, pharmaceuticals, and technology, driven by the logic of domestic brand substitution and independent performance growth, leading to increased market share and revenue opportunities for these brands [2][3]. Group 1: Domestic Brand Substitution Logic - Public funds have heavily invested in domestic brands, particularly in the cosmetics sector, benefiting from the domestic brand substitution logic, as foreign competitors like Estée Lauder face challenges in the Chinese market [3]. - The stock of Estée Lauder has seen a cumulative decline of over 25% in the last four trading days, while domestic brands like Mao Geping and Shangmei have shown strong resilience, with increases of 6.30% and 3.89% respectively [3]. - In the infant formula sector, domestic brand China Feihe has surged over 10% in the Hong Kong market, supported by significant investments from Ping An Fund and GF Fund [3]. Group 2: Independent Performance Growth - The article emphasizes the importance of independent performance, highlighting that many domestic brands achieve stable growth by relying on the vast domestic market, with companies like Bosideng generating approximately 94% of their revenue from China [6]. - The motorcycle sector has seen a surge in interest for domestic brand Chunfeng Power, with 70 public funds including it in their top ten holdings, reflecting confidence in the brand's growth potential [7]. - The article notes that many companies, including internet and consumer goods firms, have achieved consistent performance growth without international operations, indicating a strong domestic market drive [7]. Group 3: Market Opportunities and External Factors - The article points out that the strong manufacturing capabilities and demand in the domestic market provide public funds with opportunities to capitalize on undervalued stocks that have been unfairly punished by market sentiment [8]. - The pharmaceutical sector is expected to remain resilient against external factors, with domestic innovative drug companies benefiting from supportive policies and technological advancements [9][10]. - The article mentions that the introduction of zero tariffs on certain cancer and rare disease drugs in early 2024 may further mitigate external impacts on the pharmaceutical sector [10].

Core Viewpoint - The recent escalation of tariffs and countermeasures has put unprecedented pressure on import and export companies, but it also presents new opportunities for domestic brands as the focus shifts towards local consumption [1][2]. Group 1: Impact of Tariffs on International Brands - The introduction of tariffs has significantly affected international brands like Nike, which has seen its production costs in Vietnam, Indonesia, and China rise by over 30% [14][17]. - Nike's production in Vietnam has increased from 12% in 2019 to 51% currently, indicating a heavy reliance on this region for manufacturing [8]. - Adidas has experienced a decline in revenue in China, dropping from 45.46 billion yuan in 2018 to 30.97 billion yuan in 2024, with its market share decreasing from 20.74% to 13.08% [18]. Group 2: Opportunities for Domestic Brands - The shrinking market share of international brands due to tariffs creates opportunities for domestic companies to capture this market [23]. - Since 2018, domestic brands have gained traction, with 78.2% of consumers frequently purchasing local products [29]. - Li Ning has seen significant growth, with a revenue increase of 31.85% to 138.80 billion yuan in 2019, and its stock price surged nearly 20 times from 5 HKD to 102 HKD [31][33]. Group 3: Future Market Dynamics - The Chinese sports market is expected to grow, with the government aiming for the sports industry to reach a total scale of 5 trillion yuan by 2025 [41]. - The focus on domestic demand and innovation will likely become the main development line for companies in the face of international trade tensions [50]. - Investors are encouraged to focus on companies with high localization of revenue and competitive advantages in the domestic market [51].

Core Viewpoint - The article discusses the impact of the U.S. "reciprocal tariffs" on various industries and companies, highlighting that many companies have limited exposure to the U.S. market, thus minimizing the potential negative effects of the tariffs. Food and Beverage Industry - The domestic functional beverage industry shows strong resilience amid the ongoing U.S.-China tariff disputes, with Dongpeng Beverage leveraging its fully localized supply chain and innovation to mitigate risks [3]. - Dongpeng has achieved 100% domestic sourcing for key raw materials and packaging, and plans to expand its distribution network to nearly 4 million outlets by the end of 2024 [3]. - Lehui International reports that about 50% of its equipment exports go to developing countries, indicating minimal impact from the tariffs [3]. Steel Industry - Several steel companies indicate that the tariffs will have little effect on their exports to the U.S. due to the small scale of such exports [4]. - The tariffs may indirectly affect domestic steel demand, but the industry is prepared with policy measures to manage supply and demand balance [4]. Information and Communication Industry - Some products, including semiconductors, are not affected by the new tariffs, and companies report limited direct impact due to low export ratios to the U.S. [5]. - Companies like Huakin Technology maintain a diversified client base, with only about 10% of their revenue coming from direct sales to the U.S., thus minimizing the impact of the tariffs [6]. New Energy and New Materials Industry - Camel Group states that its exports to the U.S. are minimal, and the impact of tariffs is manageable [7]. - Huamao Technology plans to focus on Southeast Asia and Europe, with only a small percentage of revenue from North America, indicating limited exposure to U.S. tariffs [7]. - Bowei Alloy highlights that its U.S. projects are designed to mitigate tariff impacts, and its new production facilities in Vietnam will target markets outside the U.S. [7]. Pesticides and Fertilizers Industry - A Shanghai-listed company notes that its main export product, glyphosate, has minimal direct exposure to the U.S. market, suggesting potential benefits from the tariff policy due to competitive dynamics [8]. Publishing Industry - Leading publishing companies like Xinhua Wenhui and Phoenix Media assert that the tariffs have negligible effects on their operations, as their business primarily focuses on domestic markets with no significant import/export activities [9].