Core Viewpoint - The report from Industrial Securities emphasizes that boosting domestic demand will be a key focus for economic development in 2026, with significant potential for growth in consumer services compared to overseas markets, supported by improved policies on consumption subsidies [1] Group 1: Economic Outlook - The service consumption sector is expected to become a new focal point for the country, with monetary, temporal, and supply-side constraints providing strong policy support [1] - The report suggests that the allocation of funds in the sector is at a historical low, and overall valuations have already reflected many pessimistic expectations [1] - The year 2026 is anticipated to be a pivotal year for service consumption, with policies gradually aligning with residents' income expectations, leading to a recovery in inflation expectations and sector-specific prosperity [1] Group 2: Key Investment Themes - Mainline theme of cyclical recovery includes high-end recovery and a new duty-free cycle driven by increasing policies, a turning point in hotel supply-demand balance, and improved CPI expectations reflected in restaurant same-store performance [1] - The secondary theme focuses on specific sectors benefiting from stable employment policies, including public examinations and vocational education, silver-haired tourism, innovative tea drinks, and advancements in new technologies and AI applications [1] Group 3: Holiday Performance Insights - The report highlights that the high consumer activity during the Spring Festival has positively impacted the performance of chain consumption and travel leaders in Hong Kong and the US stock markets, with some undervalued education stocks experiencing a rebound due to liquidity recovery [1] - The duty-free sector, which had high pre-holiday expectations, saw some corrections before the holiday [1] Group 4: Travel and Tourism Data - During the Spring Festival, cross-regional personnel flow in China increased by 9.6% year-on-year, with railway and civil aviation passenger flow growing by 11.3% and 7.7%, respectively [2] - The longest Spring Festival holiday historically has driven significant growth in mid-to-long-distance travel, with waterway passenger traffic increasing by 29.8% [2] - Daily average inbound and outbound travel during the Spring Festival reached 1.977 million, a 10.1% increase compared to the previous year [2] Group 5: Subsector Performance - The hotel industry saw a 30.7% year-on-year increase in REVPAR during the Spring Festival week, with occupancy rates up by 8.1% and average daily rates up by 13.5% [3] - Duty-free shopping in Hainan during the holiday period reached 1.38 billion yuan, with a 19% increase in spending and a 24.6% increase in visitors compared to the previous year [3] - Local retail and dining sales during the first four days of the holiday increased by 8.6% compared to the same period in 2025, indicating a ramp-up in local consumption [3]

Group 1 - The tourism ETF has risen over 4% as the travel sector, including airlines, hotels, and scenic spots, shows significant activity ahead of the Spring Festival holiday [1] - Spring and Autumn Tourism data indicates that the number of bookings for the winter and Spring Festival holidays has exceeded last year's figures, with domestic travel during the New Year holiday reaching 142 million trips, a year-on-year increase of 5.2% [2] - The Ministry of Culture and Tourism, along with other departments, has issued guidelines to encourage employee tourism and cultural consumption, aiming to enhance the consumption environment and release potential spending power [2] Group 2 - The "Two New" policy for 2026 aims to boost domestic demand, with a focus on enhancing service consumption, which has significant growth potential compared to overseas markets [3] - The policy includes a special bond issuance of 62.5 billion yuan to support the replacement of old consumer goods, optimizing subsidy standards and implementation mechanisms [3] - Analysts suggest that the upcoming Spring Festival holiday will continue the positive trend seen during the New Year holiday, with a focus on companies with strong earnings growth in the travel chain and related industries [3] Group 3 - Leading tourism companies are expected to benefit from policy support, with anticipated growth in employee cultural and sports consumption driving demand in the short term [4] - Measures such as scenic area annual tickets and cultural consumption vouchers are expected to further release consumer demand, presenting potential growth opportunities for the industry [4]

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]