Market Performance - Major indices experienced a decline, with the Shanghai Composite Index falling by 1.95%, Shenzhen Component Index down by 3.04%, and ChiNext Index dropping by 3.36%, all breaking below the 30-day support line [1] - Hong Kong's Hang Seng Index decreased by 2.48%, and the Hang Seng Tech Index fell by 4.05%, both reaching a one-month low [1] - Weekly performance showed that except for the CSI Dividend Index which rose by 0.67%, all major indices in Hong Kong and A-shares were in the red, with the Hang Seng Tech Index down nearly 8% for the week [1][3] Sector Performance - In the Shenwan first-level industry sectors, banking and coal sectors saw the highest gains, while electronics, media, automotive, and telecommunications experienced significant pullbacks [5] - The banking sector rose by 4.89% and coal by 4.17%, while sectors like electronics and media saw declines of over 7% [7][8] ETF Performance - The A500 ETF (512050) fell by 3.17% this week, significantly lower than the over 5% drop in innovation indices [10][12] - The consumption ETF was the best performer this week, with a slight decline of 0.35%, recovering its year-to-date losses and turning positive by 3.18% [15] - The Hong Kong innovative drug ETF dropped nearly 6% this week, with a cumulative decline of 9.67% in October [22][24] Investment Opportunities - The A500 ETF is highlighted as an ideal tool for investing in core A-share assets, with a balanced coverage of 35 first-level industries and a focus on leading companies [12][14] - The index's structure includes a mix of traditional, cyclical, and technology growth sectors, providing a defensive investment strategy [13] - The upcoming Q4 is expected to present new consumption growth opportunities, particularly in service-oriented sectors, as well as potential rebounds in innovative drug and medical device sectors [21][22][24]

Market Performance - Major indices experienced a decline, with the Shanghai Composite Index falling by 1.95%, Shenzhen Component Index down by 3.04%, and ChiNext Index dropping by 3.36%, all breaking below the 30-day support line [1] - Hong Kong's Hang Seng Index decreased by 2.48%, and the Hang Seng Tech Index fell by 4.05%, both reaching a one-month low [1] - Weekly performance showed that except for the CSI Dividend Index which rose by 0.67%, all major indices in Hong Kong and A-shares were in the red, with the Hang Seng Tech Index down nearly 8% [1][3] Sector Performance - The banking and coal sectors showed positive performance, with the banking sector up by 4.89% and coal sector up by 4.17% [5][7] - In contrast, the electronics, media, automotive, and telecommunications sectors experienced significant declines [5] ETF Performance - The A500 ETF (512050) fell by 3.17% this week, significantly lower than the over 5% drop in innovation indices [10][12] - The consumption ETF was the best performer among the ETFs, with a slight decline of 0.35%, recovering its year-to-date losses and turning positive by 3.18% [14] - The Hong Kong innovative drug ETF dropped nearly 6% this week, with a cumulative decline of 9.67% in October [21] Investment Trends - There is a notable shift in fund allocation towards low-volatility dividend stocks and consumer sectors, indicating a potential change in investment strategy [16] - The upcoming Q4 is expected to present new growth opportunities in consumer sectors, particularly in service-oriented consumption due to potential external demand challenges [20][21] - The market is also focusing on the third-quarter reports, with expectations for improvement in fundamentals and potential reversals in performance for sectors like innovative pharmaceuticals and medical devices [23]

Consumer Macro Strategy - The report highlights three major events that influenced consumer market trends over the past two weeks, including stable growth in overall consumption during the Mid-Autumn and National Day holidays, with a notable increase in outbound tourism but fewer domestic consumption highlights leading to a post-holiday decline in related sectors [3][10] - The Q3 earnings preview indicates that while the overall consumer service sector remains stable compared to Q2, consumption-related products face high base pressure in Q4, and other sectors are in a positioning phase after negative earnings surprises in Q3 [3][10] - The ongoing US-China technological competition is expanding into the consumer sector, with new tariffs announced by the US on imports from China, posing challenges for export-oriented consumer companies [3][10] New Consumption Manufacturing - The two-wheeler market showed strong performance in Q3, with healthy inventory levels in downstream channels, but the industry faces a critical test in Q1 2026 [21] - The pet industry is experiencing weaker performance in the off-season, but the upcoming Double Eleven shopping festival is expected to act as a catalyst [21] Light Industry Manufacturing - In the home furnishing sector, domestic demand remains weak due to unhealed real estate issues, while external demand faces increased tariff risks, with significant tariff hikes announced by the US [24] - The new tobacco sector is seeing intensified actions against illegal e-cigarettes in the US, benefiting legitimate brands, while HNB products maintain strong production schedules in Japan and Europe [27] - The packaging paper market is experiencing a bullish sentiment with frequent price increases expected [27] Textile and Apparel - The apparel retail sector showed a year-on-year growth of 3.1% in August, but sales weakened in September and during the National Day holiday due to weather conditions and timing changes [29] - The report suggests focusing on brands with unique market positions and those showing significant performance advantages in sub-sectors [29][30] Beauty and Personal Care - The beauty sector is recovering after a previous decline, with cosmetic retail sales increasing by 5.1% year-on-year in August, indicating a positive trend [31] - Recommendations include focusing on leading brands with strong performance and those undergoing successful reforms [31] Home Appliances - TV panel prices remained stable in early October, with various sizes maintaining consistent pricing [32] - Gree Electric's new product line aims to capture the online market segment, enhancing its competitive position [32][33] Retail and E-commerce - Offline retail shows signs of stabilization, with supermarkets performing well while department stores face slight pressure [34] - The jewelry sector is benefiting from rising gold prices, enhancing consumer acceptance and brand premium capabilities [34] Social Services - The report expresses optimism for high-value dining and the recovery of mid-to-high-end restaurants, alongside stable growth in tourism and education sectors [35] - The tea beverage market is expected to see a decline in performance due to policy impacts, with leading brands like Mixue Ice City and Gu Ming showing growth potential [36]

Investment Rating - The industry investment rating is "Maintain Overweight" [5] Core Viewpoints - The travel and consumption market remains vibrant, with significant increases in cross-regional travel during the holiday period, indicating strong consumer activity [1][2][3] - The report highlights four main investment themes: new consumption growth, transformation and reform opportunities, overseas expansion, and favorable policies [4][7][8] Summary by Sections Travel and Tourism - During the Mid-Autumn and National Day holidays, cross-regional travel is expected to reach 2.36 billion trips, a 3.2% increase from last year [1] - Tourist attractions have seen record visitor numbers, with notable increases in various regions, such as a 22.16% rise in visitors to Changbai Mountain [2] Hotel and Retail Performance - Hotel occupancy rates have improved, with an average of 64.7% during the first four days of the holiday, up 2 percentage points year-on-year [2] - Retail sales from key enterprises increased by 3.3% year-on-year during the holiday period, with specific regions like Guangxi showing an 11.3% increase [3] Investment Recommendations - Short-term focus on companies with strong Q3 performance certainty and those likely to benefit from the upcoming holiday season, including cross-border e-commerce and certain tourist attractions [4] - Recommended companies include Xiaogoods City, Yonghui Supermarket, and Jiuhua Tourism, among others [4][7][8]

Investment Rating - The report maintains a "Buy" recommendation for Nobon Co., Ltd. in the non-woven cleaning products sector, highlighting its high growth potential [1]. Core Views - The textile and apparel sector has shown weaker performance compared to the market, with the SW textile and apparel index declining by 2.1% from July 28 to August 1, underperforming the SW All A index by 1.1 percentage points [4]. - The report emphasizes that domestic demand recovery is a crucial factor for investment in 2025, with quality domestic brands expected to reverse their current challenges [9][11]. Industry Data Summary - Retail sales for clothing, shoes, and textiles in China reached 742.6 billion yuan in the first half of 2025, reflecting a year-on-year growth of 3.1% [25]. - In terms of exports, China exported textiles and apparel worth 143.98 billion USD in the first half of 2025, a slight increase of 0.8% year-on-year, with textile yarns and fabrics contributing 70.52 billion USD, up 1.8%, while apparel exports decreased by 0.2% to 73.46 billion USD [30]. - Cotton prices have seen a decline, with the national cotton price B index reported at 15,221 yuan per ton, down 1.5% as of August 1, 2025 [36]. Company-Specific Insights - Nobon Co., Ltd. is positioned well in the non-woven cleaning products market, benefiting from partnerships with major clients like Sam's Club and Yonghui, which are expected to drive performance beyond expectations [9]. - Adidas reported a 2.2% year-on-year revenue increase to 5.95 billion euros in Q2 2025, with a notable 12% growth in the Adidas brand revenue when excluding currency effects and the Yeezy series [11]. - The report suggests that the textile manufacturing sector may see a recovery in expectations due to the ongoing U.S.-China trade negotiations and the potential for tariff adjustments [10].