Core Insights - The report highlights a strong start to the travel season with increased domestic travel during the New Year holiday, indicating a positive trend for the upcoming Spring Festival and suggesting a prolonged peak season for off-season operators [4][11]. Domestic Travel - Domestic travel volume increased as expected, with 142 million domestic trips taken during the New Year holiday, representing a 5.2% increase compared to 2024. Total spending reached 84.789 billion yuan, up 6.3% year-on-year, with per capita spending increasing by 1.1% [4][11]. - The average daily cross-regional movement during the holiday was 198 million people, a 19.5% increase year-on-year, with significant growth in railway and civil aviation passenger volumes [11][19]. Sub-Industry Performance - Duty-free sales in Hainan saw significant growth, with sales volume and value increasing by 49.9% and 27.1% respectively compared to 2024. The average spending per person also rose by 18.0% [20]. - Hotel demand showed double-digit growth, although the revenue per available room (RevPAR) decreased by 2.6% due to high base effects from 2019. The overall hotel room supply has increased by 16% since then, indicating a recovery in travel demand [26][30]. - Scenic spots performed well, particularly mountainous areas, with notable increases in visitor numbers and revenue for key attractions [31][33]. Investment Recommendations - The report suggests focusing on the service consumption sector in 2026, as it is expected to become a key driver for economic growth. The report emphasizes the potential for high-end recovery and the rebalancing of supply and demand in the hotel sector [4][30]. - Key recommended stocks include China Duty Free Group, Huazhu Group, ShouLai Hotel, Ctrip Group, Meituan, and Haidilao, among others, as they are expected to benefit from the anticipated recovery in service consumption [4][34].

Core Viewpoint - The report from Guosen Securities emphasizes that boosting domestic demand will be a key focus for economic development in 2026, with significant potential for growth in service consumption compared to overseas markets, supported by monetary, temporal, and supply-side constraints [1] Group 1: Sector Overview - Overall, there is a moderate recovery in the consumption sector, with service consumption growth outpacing goods consumption and restaurant growth, leading to an increasing share of service consumption [1] - Changes in demand, policy, and technology are driving structural shifts in the market, with younger consumers favoring experiential spending, while B2B demand remains at a low point [1] - Policy factors and globalization are influencing corporate decisions, leading to market reshuffling and transformations in industries like high-end dining, while outbound consumption remains a significant growth curve [1] Group 2: Market Performance - The consumer services sector has underperformed year-to-date, with overall gains of 14.55%, lagging behind the CSI 300 by 3.81 percentage points; however, the sector has shown signs of stabilization since Q4, outperforming the benchmark [2] - The proportion of holdings in consumer services sector funds has dropped to a historical low of 0.29% as of Q3 2025, down 0.10 percentage points from Q2 2025 [2] Group 3: Sub-industry Insights - Duty-Free: Domestic duty-free is expected to gradually capture high-end demand due to policy support and strengthened supply chains, potentially leading to a new cycle and valuation uplift [3] - Hotels: Opportunities arise from improving supply-demand dynamics, with steady growth in leisure tourism and a gradual bottoming out of business travel demand [3] - Scenic Areas: The performance of scenic areas is influenced by calendar effects, with a focus on trends that align with demographic changes and local asset integration [3] - OTA: Online Travel Agencies are likely to benefit directly from service consumption policies, with stable profit margins being the main trend [3] - Chain Dining: As delivery subsidies taper off, leading brands are innovating product lines to address market pressures, with potential for recovery if CPI trends improve [3] Group 4: Education Sector - The education sector is expected to maintain its attractiveness due to strong employment orientation and the relative lag in public examination recruitment and vocational training, alongside advancements in AI applications [4] Group 5: Human Resources - Human resources are viewed as a barometer for economic recovery, with a focus on improving labor sentiment among enterprises and the empowerment of AI technology [5]