Core Insights - The A-share market saw a collective rise in the three major indices on Monday, with the Shanghai Composite Index up by 0.12%, the Shenzhen Component Index up by 0.44%, and the ChiNext Index up by 0.96%. The total trading volume in the Shanghai and Shenzhen markets reached 17,419.14 billion yuan [2][6] - In terms of industry performance, the defense and military, non-bank financial, and pharmaceutical sectors led the gains, while coal, steel, and transportation sectors lagged behind [2][6] - The report highlights a significant differentiation in performance within the social service sector, with 31 listed companies having released their 2025 semi-annual earnings forecasts, resulting in a disclosure rate of 39%. The overall pre-profit rate stands at 55%, ranking fourth among the eight major consumption sectors [8][9] Industry Analysis - The social service sector is experiencing a divergence in performance, with 17 out of 31 companies expected to be profitable in the first half of 2025. The pre-profit rate of 55% indicates a competitive position within the consumption sectors [9] - The report emphasizes the importance of expanding domestic demand and boosting consumption as key strategies for supporting stable economic growth. The potential of lower-tier markets continues to be a significant factor in solidifying the consumption base [8] - The education sector shows signs of marginal improvement, with a pre-profit rate of 63% and a notable decrease in the proportion of loss-making companies. Conversely, the tourism sector faces challenges, with a pre-profit rate of only 36% [11]

Investment Rating - The industry is rated as "Outperforming the Market" with an expected relative increase of over 10% in the next six months compared to the market index [25]. Core Insights - As of July 25, 2025, 31 listed companies in the social service sector have released their performance forecasts for the first half of 2025, with a disclosure rate of 39%. The overall pre-profit rate stands at 55%, ranking fourth among eight major consumption sectors [1][2][23]. - The sector is expected to support stable economic growth through consumption stimulation and expansion of domestic demand. The potential of lower-tier markets continues to be released, while overseas expansion opens up new growth opportunities. Service consumption is approaching a critical point of 50%, likely accelerating its role as the main component of household consumption [1][23]. Summary by Sections Disclosure Rate and Performance - The social service industry has a disclosure rate of 39%, ranking third among the eight major consumption sectors. Out of 80 A-share companies, 31 have published performance forecasts, with 17 companies expected to be profitable, resulting in a pre-profit rate of 55% [2][10]. - The performance differentiation is notable, with the proportion of companies expecting profit increases or slight increases significantly declining to 13% and 6%, respectively. Additionally, 19% of companies are expected to turn losses into profits, an increase of 11 percentage points compared to the first half of 2024 [2][10]. Sector Performance - Service sectors are performing better, with over half of the companies in sports, hotel and catering, tourism and scenic spots, and education disclosing their half-year results. The education sector shows a pre-profit rate of 63%, indicating marginal improvement, while the tourism sector faces pressure with pre-profit rates of 40% and 36% for hotel and catering, and tourism and scenic spots, respectively [3][14]. - The tourism and scenic spots sector continues to face challenges, with the proportion of companies expecting profit increases dropping from 29% to 9%, while the proportion of companies continuing to incur losses has risen to 45%. However, 18% of companies have shown signs of recovery [3][15]. Investment Recommendations - The report suggests focusing on companies with scale effects and significant performance elasticity in the chain catering sector, stable operators in natural scenic spots and ice and snow tourism, travel agencies benefiting from the recovery of customer flow, and duty-free retailers driven by both policy and demand [1][23].