Investment Rating - The industry rating is "Outperform the Market" [7][60]. Core Insights - The consumer market showed a steady recovery in January-February 2026, with total retail sales reaching 8.61 trillion yuan, a year-on-year increase of 2.8%, significantly accelerating from December 2025 [3][13]. - The rural market continues to outperform urban areas, confirming the judgment that rural consumption has a higher marginal propensity to consume and greater resilience [3][14]. - Swarovski's brand transformation is yielding results, with 2025 revenue of 1.969 billion euros, an organic growth of 6%, and EBITDA increasing by 12% [4][29]. - Samsonite's revenue for 2025 was 3.498 billion dollars, a slight decline of 2.5%, but showed signs of recovery in Q4 with positive growth in Asia, Europe, and Latin America [4][30]. Summary by Sections Consumer Market Performance - In January-February 2026, retail sales in urban areas grew by 2.7%, while rural areas saw a growth of 3.2%, indicating a 0.5 percentage point advantage for rural consumption [14]. - The share of county and rural retail sales in total retail sales reached 38.5%, up 0.1 percentage points from the previous year [14]. - Basic and optional upgrade consumption showed positive trends, with retail sales of essential goods growing significantly [23]. Company Performance - Swarovski's revenue growth was supported by a strong performance in direct sales and the North American market, with all regions and channels reporting growth [4][29]. - Samsonite's strategy to expand from traditional travel products to a broader lifestyle category is beginning to pay off, with improvements in direct retail sales [4][30]. Market Trends - The overall consumer recovery is not solely driven by subsidies but is supported by improved purchasing behavior, increased foot traffic, and festive activities [23]. - The demand for experience-oriented, upgraded, and smart green consumption continues to be a major highlight, with significant growth in service retail sales [28].

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The wealth effect from the US stock market significantly drives service and high-end consumption, with stock assets comprising 37% of US household net worth as of Q3 2025, while real estate accounts for 26% [13][15] - In China, high-end and discretionary consumption is closely tied to real estate and disposable income, with real estate constituting 60%-70% of household assets, leading to a stronger correlation between consumption and real estate market conditions [41][43] - Recent policy measures and macroeconomic improvements are expected to boost high-end consumption recovery in China, supported by lower risk-free interest rates and improved liquidity in the banking sector [2][4] Summary by Sections 1. US Stock Market Impact on Consumption - The correlation between US household asset growth and stock market performance is strong, with significant increases in household assets during stock market uptrends [7][13] - The wealth effect has been a major driver of service consumption growth in the US, with a 1% increase in household net worth leading to a 0.475% increase in personal consumption expenditure in the following quarter [30][34] 2. Chinese Real Estate Wealth Effect - China's household asset structure is dominated by real estate, with stock and fund assets making up only a small percentage, leading to a limited wealth effect from the stock market [41][47] - The growth in disposable income has been the primary driver of consumption growth in China from 2006 to 2011, while the real estate market has significantly influenced consumer confidence and spending [49][53] 3. Policy Measures and High-End Consumption Recovery - A combination of policy measures and macroeconomic improvements is expected to facilitate a recovery in high-end consumption in China, particularly in the tourism and luxury sectors [2][4] - The report highlights specific investment opportunities in the tourism sector, recommending companies such as Huazhu Group and Jin Jiang Hotels, as well as in high-end consumption like Lao Pu Gold and Caibai [4]

Group 1 - The high-end consumption market is stabilizing and showing signs of recovery, with strong momentum in the Greater China region [1][2] - From the second half of 2025, major luxury goods groups are expected to see significant improvement in sales growth in the Asia-Pacific region (excluding Japan), with LVMH and Richemont experiencing their first positive growth after seven consecutive quarters [1] - The improvement in the Chinese market is a key variable for the performance recovery of global luxury goods groups, with major brands optimistic about the long-term potential of the Chinese market [1] Group 2 - The retail sales growth of high-end shopping malls in China has significantly increased in the second half of the year, with retail sales of tenants in Hang Lung Properties' mainland malls expected to grow by 4% year-on-year in 2025 [1] - Swire Properties' malls have also seen a notable acceleration, with the Shanghai Xinyi Swire City benefiting from the iconic project "Louis" leading to a 49.6% increase in retail sales [1] - The wealth effect is driving a rebound in high-end consumption demand, with high-frequency indicators such as the growth of wealthy individuals' assets, duty-free data from Hainan, and Macau gaming data confirming this recovery [2]

Investment Rating - The industry investment rating is "Outperform Market" (maintained) [1] Core Insights - The high-end consumption market is stabilizing and recovering, with strong recovery momentum in the Greater China region [3][68] - Starting from the second half of 2025, major luxury goods groups in the Asia-Pacific region (excluding Japan) have seen significant improvement in sales growth, with LVMH and Richemont reporting positive growth for the first time in seven quarters [4][68] - The recovery of the Chinese market has become a key variable for the performance recovery of global luxury goods groups, with brands optimistic about the long-term potential of the Chinese market [4][68] Summary by Sections High-End Consumption Recovery - The high-end consumption data tracking system indicates a recovery in high-end consumer demand driven by wealth effects, with high-frequency indicators confirming this recovery [4][43] - Wealthy individuals' asset growth, duty-free shopping data from Hainan, Macau gaming data, and high-end hotel performance serve as indicators for high-end consumption trends [4][43] Investment Recommendations - The report suggests focusing on high-end commercial real estate and luxury goods stocks, including China Resources Mixc Lifestyle (1209.HK), Hang Lung Properties (0101.HK), Swire Properties (1972.HK), and luxury brands such as Lao Pu Gold (6181.HK), Mao Ge Ping (1318.HK), and Xirui (2507.HK) [4][68] Hang Lung Properties Insights - In 2025, Hang Lung Properties' retail sales in mainland malls are expected to increase by 4% year-on-year, with significant acceleration in the second half of the year [12][17] - The company is optimizing tenant management to enhance mall content and experience, achieving record high foot traffic in mainland malls [18][22] Swire Properties Insights - Swire Properties' malls are expected to continue recovering in 2025, with notable performance from Shanghai's Xinyi Swire [32][40] - The report highlights that the retail sales growth of Swire Properties' malls has significantly accelerated in the second half of 2025, indicating strong recovery momentum in the high-end consumption market [32][40]

Summary of Conference Call on High-End Shopping Centers Industry Overview - The discussion revolves around the high-end shopping center industry, particularly focusing on the performance during the Chinese New Year holiday period in 2026 compared to 2025 [1][2]. Key Performance Metrics - **Sales Performance**: - Total sales during the 7-day Chinese New Year period in 2026 reached approximately 4.43 billion RMB, representing a 25.3% increase compared to 2025 [3]. - Same-store sales growth was about 13.2% [3]. - **Customer Traffic**: - Total customer traffic was approximately 52.93 million visits, marking a 27.7% increase year-over-year [3]. - Same-store traffic growth was around 12.9% [3]. - **Average Transaction Value**: - The average transaction value during the holiday was 193 RMB per person, reflecting an 8.9% increase from 2025 [4]. Holiday Performance Breakdown - **Sales Distribution**: - The first half of the holiday (from New Year's Eve to the third day) accounted for 60%-65% of total sales, while customer traffic during this period was 62%-67% [7][8]. - The average transaction value in the first half was 10%-15% higher than in the second half [8]. - **Promotional Activities**: - The first half of the holiday featured more aggressive promotional activities, contributing to higher sales and customer traffic [9][10]. Category-Specific Performance - **Luxury Goods**: - Sales from six major luxury brands (including LV, Gucci, Prada, Hermès, Chanel, and Dior) totaled approximately 4.43 billion RMB, with a 10.4% increase year-over-year [13]. - **Apparel**: - The apparel category (including both luxury and affordable brands) generated around 3.78 billion RMB, with a 29.1% increase compared to 2025 [14]. - **Dining**: - The dining sector saw sales of approximately 3.07 billion RMB, reflecting a 24.7% increase [15]. - **Jewelry**: - The jewelry category generated about 415 million RMB, with a 6.4% increase [16]. - **Cosmetics**: - The cosmetics sector achieved sales of approximately 377 million RMB, with a notable 29.6% increase [16]. - **Supermarkets**: - Supermarkets within the shopping centers reported sales of around 213 million RMB, marking a 27.7% increase [17]. - **Cinemas**: - Cinema sales reached approximately 86 million RMB, with a 27.8% increase [17]. Competitive Landscape - High-end shopping centers are performing well compared to other retail formats, with many lower-tier shopping projects struggling [6]. - The luxury market is experiencing a mixed performance, with some brands like Hermès and Prada showing strong growth, while others like Gucci are seeing a decline [19][20]. Future Outlook - The expert anticipates that the strong performance of luxury brands will continue into 2026, with expectations of sustained growth for brands like 老铺 (Lao Pu) and potential growth for competitors like 君佩 (Jun Pei) [36][39]. - The overall sentiment is cautiously optimistic, with a focus on maintaining strong sales performance while navigating market challenges [36][39]. Additional Insights - The expert noted that the performance of various brands can vary significantly based on location and market conditions, with first-tier cities generally outperforming second-tier cities [22]. - The discussion highlighted the importance of promotional strategies and customer engagement during peak shopping periods, which are critical for driving sales in high-end shopping centers [10][11].

Core Viewpoint - The report from Credit Lyonnais indicates that while awaiting data from the Ministry of Culture and Tourism regarding the Spring Festival, overall consumer sentiment in mainland China remains positive, with strong tourism activity observed [1] Group 1: Consumer and Tourism Trends - The average daily cross-border passenger flow is expected to increase by approximately 14% year-on-year, according to the National Immigration Administration [1] - Hainan's duty-free store consumption remains resilient due to stronger promotional activities and policy-driven demand, although this has largely been reflected in the stock price of China Duty Free Group (01880, 601888.SH) [1] Group 2: Box Office and Luxury Goods - Movie box office performance has been weak, reaching the lowest level in eight years [1] - Sales of gold and jewelry continue to face pressure due to fluctuations in gold prices, while some luxury brands have performed strongly year-to-date [1] Group 3: Investment Recommendations - Credit Lyonnais believes that the Spring Festival data will likely reflect strong travel and tourism, with good performance in high-end consumption, benefiting preferred stocks such as Samsonite (01910), luxury giant LVMH, Richemont (the parent company of Cartier), and Anta Sports (02020), which is related to domestic demand [1]

Core Viewpoint - The recovery of high-end consumption in China is accelerating, driven primarily by the wealth effect of high-net-worth individuals and policy stimuli targeting the middle class [1] Group 1: Duty-Free Industry - The duty-free sector is expected to benefit significantly from the recovery of high-end consumption, with a low base and strong policy incentives driving growth [2] - The launch of the Hainan Free Trade Port is anticipated to have a substantial impact on local and national duty-free businesses, with a continued trend of high-end consumption recovery [2] - China Duty Free Group is expected to see sustained performance growth, driven by both domestic demand recovery and the untapped potential of inbound tourist spending [2] Group 2: Gold and Jewelry - Rising gold prices are favorable for high-end self-consumption and brand transformation, with consumers increasingly valuing emotional connections over mere functionality [3] - The trend of store adjustments is expected to continue, with companies that expand their channels by 2026 likely to see greater performance elasticity [3] - Companies like Lao Pu Gold and Chao Hong Ji are expected to perform well due to strategic store optimization and product offerings [3] Group 3: Baijiu Industry - The baijiu industry is showing signs of recovery, with strong demand for premium products like Moutai, which has seen prices rise above 1,700 yuan per box [4] - The overall performance of the baijiu industry is expected to stabilize, with a gradual easing of price pressures and improved market conditions post-Spring Festival [4][5] Group 4: Medical Aesthetics - The medical aesthetics market is entering a new phase, driven by innovative ingredients like recombinant collagen and PDRN, which meet the growing consumer demand for regenerative and anti-aging solutions [6] - Companies with early advantages in regulatory compliance are establishing significant barriers to entry, particularly in the emerging biocompatible materials market [6] - The market dominance of these new ingredients is expected to follow a clear hierarchy, with recombinant collagen leading the way [6]

Core Insights - The high-end consumption market in China is undergoing a significant transformation, shifting from material satisfaction to a focus on spiritual fulfillment and diverse experiences [1][10] - Over 40% of the elite population considers "active living, not lying flat" as a core element of a high-quality life, emphasizing self-expression and social integration through consumption [1][10] Consumer Segmentation - The elite population is categorized into three segments: "Mid-High Elite," "Super Elite - Y Generation and above," and "Super Elite - Z Generation," highlighting fundamental differences in motivations and behaviors among these groups [2][10] - The Mid-High Elite and Y Generation Super Elite remain the core market forces, focusing on quality, individuality, and social recognition, while the Z Generation Super Elite shows stronger consumption resilience and a broader range of interests [2][10] Category Preferences - Traditional luxury goods are under pressure as their "external value" diminishes due to homogenization and mass-market trends, while categories like high-end travel, entertainment, beauty, and cutting-edge technology are experiencing significant growth [3][10] - These emerging categories cater to the elite's diverse value points, such as self-enjoyment, individuality, social resonance, and trend-seeking [3][10] Channel Dynamics - The integration of online and offline channels is becoming increasingly important in the consumer decision-making process, with different categories exhibiting distinct purchasing behavior patterns [4][10] - Platforms like WeChat, lifestyle platforms, short videos, and e-commerce play differentiated roles in content marketing, professional reviews, interactive live streaming, and trustworthy transactions, creating a comprehensive touchpoint network for elite consumers [4][10] Brand Implications - Brands need to transcend product functionality and delve into the emotional and spiritual realms of the elite population, establishing deep resonance through creative storytelling and seamless online-offline experiences [5][10] - The focus should be on understanding the role and value proposition of the brand in the lives of target consumers, utilizing innovative formats to convey brand philosophy and maintain ongoing dialogue on a spiritual level [5][10] Key Findings - Elite consumer spending has slightly decreased by 6% over the past year, with a projected slowdown to 4%, primarily influenced by macroeconomic factors rather than long-term behavioral changes [27][10] - 42% of the elite population believes that "spiritual wealth and not lying flat" are essential elements of a high-quality life, indicating a growing importance of internal fulfillment [27][10] - The Z Generation Super Elite is reshaping the future of high-end lifestyles, with distinct values and consumption behaviors that differ from previous generations [27][10]

Core Insights - The essence of high-end retail is that true brand elevation must be measured by physical space, with retail stores being essential for luxury brands to convey their value [1][2] - The opening of Gao Fan's first boutique in Hangzhou marks a strategic move to engage with discerning high-net-worth consumers in a competitive luxury market [2][3] Group 1: Brand Positioning - Gao Fan's store is located in Hangzhou Tower, a prestigious shopping destination that has set the standard for high-end retail in Zhejiang since 2004 [1][2] - The store's opening is part of Gao Fan's global channel strategy, reinforcing its position as one of the top two high-end down jacket brands [2][3] - The collaboration between Gao Fan and Hangzhou Tower reflects a mutual strategic alignment, focusing on unique value propositions such as the fusion of world-class materials and Chinese heritage craftsmanship [3][4] Group 2: Market Trends - The luxury market is experiencing a shift from ostentatious consumption to identity-driven consumption, necessitating a strong physical retail presence for high-end brands [2][4] - The concept of a "Golden Value Corridor" is emerging in China's high-end market, where brands like Gao Fan are redefining categories through exceptional product quality and unique value barriers [4][5] Group 3: Product Innovation - Gao Fan has developed a robust product system, termed the "Black Gold Standard," which utilizes premium down sourced from extreme cold regions and integrates advanced technology with traditional craftsmanship [5][6] - The brand's commitment to innovation is evidenced by 185 patents and collaborations with top research institutions, enhancing the functionality and luxury of its products [6][10] Group 4: Sales Performance - Gao Fan has achieved significant commercial success, leading the high-end down jacket sales online and expanding its presence in top-tier retail locations, with average transaction values between 3,000 to 5,000 yuan [6][7] - Recent sales data indicates that Gao Fan's offline stores have generated over 100 million yuan in revenue within three months, showcasing strong market acceptance [6][7] Group 5: Cultural Narrative - Gao Fan's approach emphasizes a unique cultural narrative that integrates Eastern aesthetics with global standards, positioning the brand as a cultural ambassador in the luxury market [10][12] - The brand's strategy reflects a broader trend among Chinese companies to transition from being mere suppliers in the global value chain to defining consumer experiences and standards [13]

Group 1 - The core activity of SKP's Spring Festival event runs from January 24 to February 14, attracting significant consumer interest, particularly at the Lao Pu Gold stores [1] - On the first day of the event, there was a notable increase in queue numbers compared to the previous year, with hundreds of customers waiting to enter the Lao Pu Gold store [1] - Lao Pu Gold is positioned as a leading high-end jewelry brand in China, with projections indicating it will surpass Richemont's jewelry revenue in the Chinese market by 2025 [1] Group 2 - Lao Pu Gold is set to open an independent store on the first floor of Beijing SKP in September 2025, challenging the dominance of international luxury brands in prime retail locations [2]