Core Viewpoint - The article discusses the rapid changes in consumer preferences among the middle class in China, particularly in outdoor activities like camping, cycling, and skiing, highlighting a shift from enthusiasm to disillusionment and financial constraints [4][6][29]. Group 1: Changing Trends in Outdoor Activities - The once-popular outdoor activities, referred to as the "three treasures" of the middle class—camping, cycling, and skiing—are experiencing a decline in interest and participation [4][5]. - Social media trends have shifted from promoting outdoor activities to discussions about abandoning them due to high costs and inventory issues [5][6]. - The middle class's preferences are volatile, with a tendency to quickly abandon previous interests for new trends, leading to a cycle of rapid consumption and subsequent disillusionment [6][12]. Group 2: Market Dynamics and Consumer Behavior - The production of mid-to-high-end bicycles in China saw a 15.1% year-on-year increase in 2023, indicating a brief surge in interest before a market correction [9]. - Skiing gained popularity post-Winter Olympics, with a 209% increase in ski ticket orders in early November 2023 compared to 2019 [9]. - However, the skiing industry is facing significant challenges, with many brands reporting sales declines of 30%-50% and some even halting operations due to excess inventory [17][20]. Group 3: Economic Factors and Consumer Spending - The article notes a shift in consumer behavior, with middle-class individuals becoming more price-sensitive and seeking value for money, leading to a decline in spending on previously popular outdoor activities [24][29]. - The camping industry, which had seen growth during the pandemic, is now struggling with high competition and low consumer turnout, leading to many businesses closing or pivoting [21][22]. - The overall sentiment reflects a broader economic trend where middle-class consumers are prioritizing essential spending over luxury or leisure activities [24][29]. Group 4: Industry Challenges and Future Outlook - The influx of new businesses in the cycling and outdoor sectors has led to oversaturation, with many companies unable to sustain operations amid declining consumer interest [15][20]. - The article emphasizes the need for businesses in these sectors to adapt to changing consumer preferences and economic realities, suggesting that only those with a long-term vision and commitment to quality will survive [31][32]. - The narrative concludes with a cautionary note about the fleeting nature of trends and the importance of understanding the underlying consumer motivations in the outdoor industry [30][32].

Investment Rating - The report maintains a "Buy" rating for the company Zhejiang Natural (605080) with a target price based on the last closing price of 31.97 [1][7]. Core Insights - The company's Q1 performance exceeded expectations, driven by new product launches and capacity releases, with a revenue of 3.6 billion yuan, representing a year-on-year growth of 30.4%, and a net profit of 0.96 billion yuan, up 148.3% year-on-year [4][7]. - The outdoor sports industry is experiencing rapid growth, with the company positioned to benefit from the increasing penetration of TPU materials over PVC products and the emergence of new product categories [7]. - The company has established three core business segments: inflatable mattresses, waterproof/thermal bags, and water sports products, with a focus on expanding into new markets and customer bases [7]. Financial Performance Summary - In 2024, the company reported a revenue of 1 billion yuan, a year-on-year increase of 21.7%, and a net profit of 190 million yuan, up 41.7% year-on-year [4][9]. - The gross margin for 2024 was 33.7%, with a net profit margin of 18.5%, reflecting significant improvements in profitability due to effective cost control and operational efficiency [6][9]. - The company expects continued growth in net profit, projecting 270 million yuan in 2025, 380 million yuan in 2026, and 494 million yuan in 2027, with corresponding PE ratios of 17, 12, and 9 [7][9].