Core Viewpoint - The article discusses the upcoming 2025 Consumer Goods Annual Conference organized by Guotai Junan Securities, focusing on future consumption trends, opportunities in various sectors, and the impact of demographic changes on consumer behavior [3][7]. Group 1: Conference Agenda Highlights - The conference will feature a keynote speech on future consumption trends from a demographic perspective by a population expert [7]. - Sessions will cover topics such as the resurgence of domestic beauty brands, the era of functional health products, and the jewelry industry in the new consumption era [7]. - A roundtable forum will discuss opportunities in the beauty industry, emphasizing growth and policy support [7]. Group 2: Industry Insights - The conference will address the high demand and technological innovations in the cleaning appliance sector, highlighting the interplay of policy, technology, and consumer needs [10]. - The luxury goods industry will be analyzed for trends and brand differentiation, providing insights into market dynamics [11]. - The pet economy's growth will be explored, identifying potential leading companies in this sector [11].

Core Insights - The report emphasizes the distinction between "capital expenditure reduction," "capacity reduction," and "output reduction" in the context of the current anti-involution policies, suggesting that these elements will shape the supply-demand dynamics in the manufacturing sector from mid-2026 onwards [3][4][7][9]. Group 1: Anti-Involution Policies - The current anti-involution policies are reminiscent of the supply-side reforms from 2016-2017, which can be broken down into three core elements: "capacity reduction," "output reduction," and demand-side stimulation [4][8]. - "Capacity reduction" involves eliminating outdated capacity and curbing new capital expenditures, leading to a long-term decline in future capacity formation. This has historically supported high profitability in cyclical commodities like coal until 2022 [4][8]. - "Output reduction" aims to quickly improve the supply-demand balance in cyclical industries through general capacity shutdowns and production limits, which was crucial when capacity utilization rates were low [4][8]. Group 2: Current Manufacturing Sector Dynamics - The current state of supply in the midstream manufacturing sector closely resembles the upstream cycle of 2016, but the policy focus differs. The reduction in capital expenditure has reached its lowest growth rate since 2012, indicating a systemic correction of over-investment in advanced manufacturing driven by local government subsidies [9][10]. - The report anticipates that the capital expenditure growth rate will continue to decline, potentially remaining negative for an extended period, which will lead to fixed asset growth (capacity growth) being at absolute lows starting from 2026 [9][10]. - The report highlights that "capacity reduction" will manifest through delayed impacts of reduced capital expenditure, abandonment of existing projects, and mechanisms to encourage the exit of less competitive firms [9][10]. Group 3: Future Market Outlook - The report predicts that by mid-2026, the fixed asset formation growth rate of midstream manufacturing companies will fall below the nominal GDP growth rate, increasing the visibility of a turning point in supply-demand dynamics [10]. - The current low capacity utilization rates and weak internal investment willingness among firms suggest further room for decline in capital expenditure growth, reinforcing the notion that anti-involution investments will be critical for long-term profitability improvements [10]. - The report views the improvement in the supply-demand landscape of midstream manufacturing and the easing of anti-involution narratives as essential components of a bullish market outlook for 2026-2027 [10].