Core Viewpoint - The Bank of Korea will maintain its stance on interest rate cuts to alleviate the downward risks facing economic growth, with expectations of gradual recovery in consumption due to improved economic confidence and the implementation of supplementary budgets [1] Group 1 - The Bank of Korea is adjusting the timing and pace of future interest rate cuts [1]

Core Viewpoint - The economic data for May indicates a slight decline in industrial production, a rebound in consumption, and a comprehensive drop in investment, with real estate continuing to decline [1][15]. Demand Side Analysis - External demand is significantly impacted by tariff fluctuations, leading to a continued decline in exports to the U.S., while transshipment trade and European recovery support exports in a mid-high range [1][2]. - Domestic investment is broadly declining, influenced by weak real estate and infrastructure investments, while consumption is showing signs of recovery due to trade-in programs and consumption festivals [1][2]. Production Side Analysis - Industrial production growth rate fell to 5.8% year-on-year in May, primarily due to tariff disruptions affecting export strength [3]. - The service production index increased by 0.2 percentage points to 6.2% year-on-year, benefiting from the recovery in consumption [3]. Investment Trends - Fixed asset investment growth rate decreased by 0.8 percentage points to 2.7% year-on-year, with real estate investment continuing to decline significantly [5][14]. - High-tech industry investments performed well, with information services and aerospace manufacturing seeing substantial year-on-year growth [9]. Consumption Trends - Retail sales growth rose to 6.4% in May, indicating enhanced consumption momentum, with significant contributions from home appliance and communication sectors benefiting from trade-in programs [10]. - Service consumption also showed recovery, with tourism-related growth accelerating and restaurant income increasing [10]. Real Estate Market - Real estate sales area growth rate fell to -3.3% year-on-year, with new housing sales declining while prices continue to rise [14]. - The construction area growth rate rebounded significantly, although new construction area growth remains negative [14]. Employment and Future Outlook - The urban unemployment rate remained stable at 5.0%, indicating a stable employment situation despite external disruptions [15]. - There is cautious optimism regarding external demand, with potential benefits from future tariff negotiations and European recovery efforts [15].

Group 1 - In May, China's retail sales of consumer goods increased by 6.4% year-on-year, accelerating by 1.3 percentage points compared to the previous month [1] - From January to May, the retail sales of services grew by 5.2%, which is a slight acceleration of 0.1 percentage points compared to the first four months of the year [1] - The policy of replacing old consumer goods with new ones has shown significant results, leading to a rapid increase in sales of related products [1] Group 2 - In May, retail sales of household appliances and audio-visual equipment, communication equipment, cultural and office supplies, and furniture increased by 53%, 33%, 30.5%, and 25.6% respectively, contributing 1.9 percentage points to the total retail sales growth [1] - The "6·18" online retail promotion, which started on May 13, combined with the old-for-new policy, accelerated online retail sales [1] - From January to May, the online retail sales of physical goods increased by 6.3% year-on-year, accounting for 24.5% of total retail sales [1] Group 3 - The May holidays led to a rapid increase in consumption in areas such as cultural tourism, travel services, and dining out, with restaurant income growing by 5.9% year-on-year [2] - From January to May, retail sales in tourism consulting, transportation services, and cultural and recreational services maintained double-digit growth [2] - The expansion of visa-free entry for foreign visitors has stimulated the consumption market, with a more than 70% year-on-year increase in the number of foreign visitors entering under the visa-free policy during the "May Day" holiday [2]

Group 1 - The A-share market shows mixed performance, with the leading consumption ETF (159928) declining over 1% and nearing a transaction volume of 200 million CNY, while also receiving a net subscription of 10 million units, bringing its total scale to over 12.8 billion CNY as of June 11, 2025 [1] - The top ten constituent stocks of the consumption ETF mostly experienced declines, with Wens Foodstuffs down over 2%, and other major stocks like Yili, Wuliangye, and Moutai also seeing slight decreases [1][5] Group 2 - The "618" shopping festival is driving a new wave of consumer enthusiasm, with JD.com reporting over 200% growth in transaction volume and order numbers during the first hour of the event, and Tmall seeing 217 brands surpassing 100 million CNY in sales [2] - National consumption data shows a 4.7% year-on-year increase in retail sales from January to April 2025, with a notable 5.1% increase in April, supported by the "old for new" consumption policy [2] Group 3 - The white liquor sector is experiencing a bottoming trend, with market sentiment affected by new regulations limiting alcohol at business meals, but overall demand is expected to stabilize, and the sector remains attractive for investment due to low valuations and increasing dividends [3][5] - Traditional consumer brands are exploring new beverage products targeting health and wellness, with a focus on younger demographics, and are expected to benefit from high-potential channels and category growth [4][5] Group 4 - The domestic consumption sector is showing strong performance driven by multiple factors, with specific segments like beauty care, gold jewelry, and IP toys attracting significant investment interest due to their growth potential [5] - The consumption ETF (159928) is characterized by its resilience across economic cycles, with over 67% of its top ten constituent stocks being essential consumer goods, including leading liquor companies and major agricultural firms [5][6]