Investment Rating - The report indicates a positive investment outlook for the consumer finance ABS market, highlighting significant growth in issuance and market share [1][22]. Core Insights - The consumer finance ABS market has shown active issuance, with a notable year-on-year increase in both the number of issuances and total issuance volume, reaching 331 issuances and a total of 283.83 billion yuan in the first seven months of 2025, representing growth rates of 63.86% and 76.66% respectively [1][22]. - The market share of consumer finance ABS within the total ABS market has increased, now accounting for 25.90%, up by 8.99 percentage points from the end of the previous year [1]. - The report notes an expansion of market participants, with trust companies and internet institutions being the primary issuers, collectively accounting for 92.79% of the issuance volume [6][22]. - The underlying asset performance has shown volatility, but most projects have met expectations, with the cumulative default rates for bank-issued ABS being lower than those from consumer finance companies [14][21]. - The credit risk for priority securities has been decreasing, with a significant number of securities experiencing upgrades in their ratings, reflecting improved asset pool quality and transaction structure [21][22]. Summary by Sections Consumer Finance ABS Market Overview - The consumer finance ABS market has seen a robust increase in issuance, with 331 issuances totaling 283.83 billion yuan in the first seven months of 2025, marking a 63.86% increase in issuance count and a 76.66% increase in volume compared to the previous year [1][22]. - The market is dominated by the exchange market, which issued 178 consumer finance ABS, accounting for 47.50% of the total issuance volume [3][6]. Market Participants Expansion - The report highlights the entry of new market participants, particularly internet-based lending companies, which have accelerated their involvement in the consumer finance ABS market [6][22]. - Trust companies and internet institutions have been the main contributors to the issuance, with trust companies alone issuing 233 consumer finance ABS worth 181.37 billion yuan, a 91.06% increase year-on-year [6][10]. Performance of Existing Consumer Finance ABS - As of July 2025, there are 616 active consumer finance ABS projects with a total outstanding amount of 448.35 billion yuan, reflecting a 20.44% increase from the previous year [12]. - The cumulative default rates for bank-issued ABS are close to their predicted rates, while consumer finance companies show a wider range of default rates, indicating varying asset quality [14][16]. Credit Risk and Securities Performance - The report indicates that the credit risk for priority securities has been decreasing, with 138 out of 304 tracked securities experiencing upgrades in their ratings [21]. - The overall performance of consumer finance ABS has been in line with expectations, with most projects maintaining low cumulative default rates [19][22].

Core Viewpoint - Consumption is identified as a key driver for economic growth in the current domestic economic landscape, with the government prioritizing measures to boost consumption and enhance investment efficiency [1][3]. Financial Policies and Measures - The government has outlined a clear action plan to stimulate consumption through various measures, including increasing residents' income, improving consumption quality, and optimizing the consumption environment [1]. - Financial policies are highlighted as a crucial tool for promoting consumption, with new structural monetary policy tools being implemented to support the consumption market [1][3]. Role of Credit Policies - Credit policies are recognized as the primary means of boosting consumption, with a significant reduction in consumer loan interest rates from the "3" range to the "2" range due to competitive lending practices [3][4]. - The regulatory halt on "rolling" interest rates reflects concerns over excessive consumer borrowing and the need for sustainable financial practices [3][4]. Customized Financial Products - Financial institutions are encouraged to design personalized financial products and services based on individual credit status and consumption needs, including flexible repayment plans and specialized loans for various sectors such as travel, education, and home renovation [5][7]. - The importance of enhancing the consumer experience through optimized approval processes and diversified repayment options is emphasized [5][7]. Risk Management and Control - The rising trend of non-performing loans in consumer credit necessitates a focus on risk management, with financial institutions urged to strengthen their risk control capabilities [6]. - The balance between expanding loan offerings and maintaining risk control is critical, with recommendations for utilizing big data and AI for effective risk assessment [6][10]. Addressing Market Challenges - Key challenges in financial support for consumption include mismatches between financial products and consumer needs, insufficient diversification of service models, and inadequate risk management mechanisms [10]. - Solutions proposed include better identification of consumer needs, optimizing financial product design, and enhancing collaboration between financial services and emerging consumption scenarios [10][11]. Future Innovations in Financial Support - Future innovations in financial support for consumption may focus on macro policy coordination, innovative financial products, and expanding the scope of consumption scenario financing [11][12]. - The establishment of a diversified funding supply system through capital market engagement and the promotion of asset securitization in consumer finance are suggested as potential breakthroughs [11][12].