Group 1 - The report highlights a strategic shift towards large financial and consumer sectors, indicating a rebound window following the maximum negative impact from equal tariffs [1][9] - The report emphasizes that the market is approaching a phase bottom, with short-term adjustments not altering the long-term upward trend, despite liquidity pressures from the Federal Reserve's hawkish stance [2][9] - Historical analysis of the U.S. stock market shows that significant downturns typically require major negative shocks, with expected maximum adjustments around 10% in the current context [3][10][11] Group 2 - The report notes that market volume has decreased, with transaction amounts falling below 20 trillion yuan, indicating a lack of momentum in market leadership [4][12] - It suggests that the current market adjustment presents a good opportunity for accumulation, focusing on sectors with favorable risk-reward ratios, such as real estate and resource commodities [4][13][14] - The report identifies mid-term investment opportunities in high-growth sectors, waiting for renewed confidence in high-prosperity segments like storage and AI [4][13][14]

Investment Rating - Investment recommendation: Outperform the market (maintained) [7] Core Viewpoints - The social service sector's institutional holdings are at historical lows, with signs of stabilization in the hotel and employment sectors. The CPI's recovery in October reflects a warming consumer market. The report suggests focusing on "domestic demand cyclical + quality new consumption" [4][10]. - Recommended companies include Huazhu Group, Miniso, Guoquan, Green Tea Group, and Laopu Gold, which show continuous operational improvement and high valuation cost-effectiveness [4][10]. Summary by Sections 1. Market Tracking: Institutional Holdings at Historical Lows - The social service sector has underperformed the market by 9.78% year-to-date, with a year-to-date increase of 11.40% as of November 10, 2025. The sector ranks 19th among 31 primary industries [13]. - The fund holding ratio for the social service sector is 0.46%, down 0.64 percentage points from the previous quarter, indicating historical lows [17]. - October CPI data shows a year-on-year increase of 0.2%, signaling a recovery in consumer spending [22]. 2. Sub-industry Analysis: Industry Fundamentals Stabilizing - Employment: The hiring confidence index has improved, with values rising from 44.07 in August to 54.87 in October 2025 [29]. - Hotels: The RevPAR growth rate has shown improvement, with a year-on-year increase of 4.4% in the 44th week of 2025 [39]. - Duty-Free: The new duty-free policy in Hainan has led to a significant increase in shopping amounts, with a total of 5.06 billion yuan in sales during the first week of implementation [50]. - Dining: The pressure on customer spending appears to have eased, with service prices showing an upward trend [52]. 3. Investment Recommendations: Focus on Marginal Changes - The report emphasizes the importance of marginal changes and suggests actively investing in cyclical and new consumption leaders. Recommended companies include Huazhu Group, Miniso, Guoquan, Green Tea Group, and Laopu Gold, with a focus on those showing clear improvement trends [10][54].

Core Viewpoint - The service industry is showing signs of stabilization and bottoming out after experiencing price pressure and same-store sales decline in 2024, with expectations for a recovery in demand and pricing turning points in 2026 [1][2] Group 1: Industry Outlook - The service consumption sector is expected to see an increase in quality brands emerging and growing, supported by improved infrastructure for chain operations [1] - External factors such as competition from delivery platforms, new social security regulations, and the rise of pre-prepared meals are likely to optimize the competitive landscape in the long term, benefiting leading companies [1] - The restaurant and hotel sectors are identified as the most conducive for nurturing large companies [1] Group 2: Company Focus - Companies that can successfully navigate brand differentiation and lifecycle challenges are likely to emerge as winners, characterized by their ability to meet consumer value demands, possess comprehensive operational capabilities, and capture ongoing growth drivers [1] - In the restaurant sector, beverage brands in 2026 will need to be cautious of high baselines and competitive disruptions, but leading brands are expected to achieve stable performance and gradually replace smaller chains [2] - The hotel sector is anticipated to see a rebalancing of supply and demand, with a forecasted slowdown in supply growth, while high-quality leaders are expected to expand market share even during industry downturns [2] Group 3: Market Dynamics - The service industry is characterized by strong cyclical attributes, with a long-term trend towards increased flexible employment penetration [2] - The duty-free sales sector is at a low point, with attention on the potential impact of Hainan's reopening and the expansion of local channels [2] - Tourism pricing pressures and expenditure may lead to weaker stability in performance growth, with a focus on the development of scenic projects and improvements in transportation as potential catalysts [2]

Core Viewpoint - The report from China International Capital Corporation (CICC) indicates that the social services industry is expected to stabilize and bottom out in 2025 after experiencing price pressures and same-store sales declines in 2024, with a gradual easing of price wars and a potential recovery in same-store sales [1] Industry Summary - The social services industry is projected to see a recovery in 2026, driven by domestic demand recovery and policy expansion, with a focus on companies with strong internal growth capabilities and high-growth segment leaders [1] - The restaurant sector, particularly beverages, will face challenges in 2026 due to high base effects and competitive landscape disruptions, but leading brands are expected to achieve stable performance and gradually replace smaller chains [1] - The fast food segment shows resilience, while the full-service restaurant brands will experience ongoing differentiation in same-store sales [1] - The hotel industry is anticipated to rebalance supply and demand, with a slowdown in supply growth expected despite positive growth, as RevPAR (Revenue Per Available Room) continues to decline for two years [1] - The recovery of business demand is crucial for RevPAR to turn positive, with high-quality leading brands likely to expand market share even during industry downturns [1] - The labor service sector exhibits strong cyclical attributes, with a long-term trend of increasing flexible employment penetration [1] - Duty-free sales are at a low point, with attention on the marginal changes brought by the Hainan closure and the expansion of local channels [1] - The tourism sector faces price pressures and cost inputs that may weaken performance stability, with a focus on the development of scenic projects and improvements in transportation as potential catalysts [1]

Core Insights - The report indicates that the social service sector has underperformed the market, with a year-to-date increase of 4.95%, lagging behind the CSI 300 by 14.75 percentage points [4][9] - The report maintains an "Outperform" rating for the sector, suggesting a favorable investment window due to improving fundamentals and market conditions [2][4] Industry Overview - The social service sector has seen a decline in fund holdings, reaching a historical low of 0.29% by the end of Q3 2025, down 0.10 percentage points from Q2 [10][13] - The report highlights a divergence in performance among sub-sectors, with high-growth areas such as scenic spots and duty-free shops leading the gains since Q3 2025 [4][9] Financial Performance Summary - The travel chain sector showed signs of stabilization in Q3 2025, with a year-on-year revenue increase of 1%, although net profits decreased by 20% [18] - The education and human services sectors reported revenue growth of 15% and 7% respectively, with net profit growth slightly declining compared to Q2 [18][14] Sub-sector Analysis Duty-Free - The duty-free sector in Hainan has stabilized since September, with sales increasing by 3.4% year-on-year in September and 13.6% during the National Day holiday [23] - New policies implemented in November are expected to further stimulate demand and enhance the sector's performance [23] Hotels - The hotel sector has seen a narrowing decline in RevPAR (Revenue per Available Room), with Q3 declines of -2.4% for Shoulv and -2.0% for Jinjiang [27] - The report suggests that the sector is poised for recovery as supply growth stabilizes and operational efficiencies improve [27] Scenic Spots - The performance of scenic spots has varied, with natural scenic areas outperforming artificial ones, driven by consumer trends and external acquisitions [28] - The report emphasizes the importance of aligning with consumer trends and pursuing growth through acquisitions [28] Education - The education sector is experiencing robust growth, particularly in public examination preparation, with a record number of applicants for national exams [18][14] - The K12 education sector is shifting focus from supply shortages to quality, benefiting leading institutions [18] Human Services - The human services sector is in a bottoming phase, with leading companies focusing on improving operational efficiency [18] - The BCI index has shown signs of recovery, indicating a gradual improvement in hiring confidence [18]

Core Insights - The report highlights resilient growth in travel demand during the National Day holiday, with a projected year-on-year increase of 6.2% in cross-regional mobility from October 1 to 8, 2024, surpassing the pre-holiday forecast of 3.2% [4][24] - The consumer services sector underperformed the broader market in September, with the A-share consumer services sector declining by 2.69%, lagging behind the CSI 300 by 5.89 percentage points [4][5] - The report emphasizes the importance of policy support for service consumption, with various measures aimed at enhancing service sector growth and consumer spending [24][25] Subsector Insights Travel Chain Sector - The travel chain sector is expected to benefit from a shift towards experience-driven consumption, with a focus on hotel and retail experiences as the market enters a low season in Q4 [4][24] - Notable performance was observed in specific regions and segments, such as a 22% increase in visitor numbers to Changbai Mountain from October 1 to 3 and significant sales at duty-free stores in Sanya [4][24] - The report suggests monitoring the recovery of the duty-free sector and the hotel industry as supply and demand dynamics stabilize [4][24] Chain Dining Sector - The dining sector shows signs of stabilization, with leading brands in tea and fast food performing well despite concerns over the expansion capabilities of traditional dining models [4][24] - The report recommends focusing on high-quality dining leaders that have adjusted their business models to enhance growth potential [4][24] Education and Human Services Sector - The education sector is poised for growth as external uncertainties diminish, with increased demand for vocational training and educational services [4][24] - The report highlights the potential of AI in education, with ongoing advancements in educational technology expected to drive growth [4][24] Investment Recommendations - The report suggests a diversified investment strategy, recommending companies such as Trip.com, Atour, Tongcheng Travel, BOSS Zhipin, and others in the consumer services sector [4][24]

Investment Rating - The industry investment rating is "Maintain Overweight" [5] Core Viewpoints - The travel and consumption market remains vibrant, with significant increases in cross-regional travel during the holiday period, indicating strong consumer activity [1][2][3] - The report highlights four main investment themes: new consumption growth, transformation and reform opportunities, overseas expansion, and favorable policies [4][7][8] Summary by Sections Travel and Tourism - During the Mid-Autumn and National Day holidays, cross-regional travel is expected to reach 2.36 billion trips, a 3.2% increase from last year [1] - Tourist attractions have seen record visitor numbers, with notable increases in various regions, such as a 22.16% rise in visitors to Changbai Mountain [2] Hotel and Retail Performance - Hotel occupancy rates have improved, with an average of 64.7% during the first four days of the holiday, up 2 percentage points year-on-year [2] - Retail sales from key enterprises increased by 3.3% year-on-year during the holiday period, with specific regions like Guangxi showing an 11.3% increase [3] Investment Recommendations - Short-term focus on companies with strong Q3 performance certainty and those likely to benefit from the upcoming holiday season, including cross-border e-commerce and certain tourist attractions [4] - Recommended companies include Xiaogoods City, Yonghui Supermarket, and Jiuhua Tourism, among others [4][7][8]

Investment Rating - The report maintains an "Outperform" rating for the social services industry [1] Core Insights - The overall revenue of the sector is steadily increasing, but the recovery in performance is slower, with significant differentiation among sub-sectors. Attention is recommended for cyclical recovery sectors such as human resources and exhibitions, as well as resilient sectors like tourism and scenic spots [1][2] - In 2024, the social services sector achieved a total revenue of 191.54 billion, a year-on-year increase of 36.57%, while the net profit attributable to shareholders was 7.48 billion, a year-on-year decrease of 18.21%. The overall profitability has declined [10][14] - In Q1 2025, the sector generated a revenue of 44.84 billion, a year-on-year increase of 38.75%, with a net profit of 1.81 billion, a year-on-year increase of 33.06% [20][22] Summary by Sections Sector Summary - The revenue growth rate outperformed the profit growth rate, with the professional services and education sectors performing better. In 2024, the professional services sector saw a year-on-year increase of 79.57%, while the education sector's profit level improved significantly [10][14] - In Q1 2025, the professional services sector led with a revenue growth of 89.62%, followed by tourism and scenic spots at 7.39% [22] Tourism - The domestic travel market shows strong resilience, with a total of 5.615 billion domestic tourists in 2024, a year-on-year increase of 14.80% [34] - The cross-border travel market is experiencing high demand, with inbound tourists reaching 132 million in 2024, a year-on-year increase of 60.8% [40] Hotels - Business travel demand is still recovering, with the RevPAR expected to be under pressure throughout 2024 [13] Catering - The catering market is expected to see slower revenue growth in 2024, with Q1 2025 showing some improvement [16] Duty-Free - Duty-free sales in offshore areas are showing marginal improvement, with city channels expected to contribute to growth [18] Human Resources - The human resources sector is experiencing stable data operations, but employment market pressures remain [22] Exhibitions - The domestic exhibition market is steadily growing, with the number of exhibitions remaining stable in 2024 [24]

Core Insights - The report emphasizes the importance of domestic demand and high-performing leading companies, as well as sectors benefiting from increased tariffs [3][7] - The consumer services sector has outperformed benchmarks since March, with low-valued high-performing stocks showing resilience amid tariff negotiations [3][10] Sector Analysis 1. Consumer Internet Platforms - The performance of leading companies in the consumer internet space is expected to be stable, with significant growth in domestic travel during the Qingming holiday [4] - Companies like Tongcheng Travel and Ctrip are projected to benefit from increased user engagement and market penetration [4][19] 2. Natural Scenic Area Leaders - Companies in this sector are noted for their defensive attributes, with expected profit growth driven by increased visitor numbers during holidays [4] - Jiuhua Tourism is anticipated to see a net profit increase of approximately 32% in Q1, supported by improved visitor flow [4][8] 3. Chain Consumption Leaders - The hotel industry is showing signs of stabilization, with RevPAR (Revenue per Available Room) expected to improve due to rising travel demand [5][25] - Major hotel chains are focusing on expanding their market share through aggressive opening strategies, with significant growth targets set for 2025 [28][33] 4. Duty-Free Sector - The duty-free market is positioned to benefit from tariff increases, with a focus on the recovery of consumer spending and the influx of foreign tourists [6][7] - The report highlights the potential for growth in the duty-free segment as policies evolve to stimulate economic recovery [6][19] Investment Recommendations - The report suggests a focus on companies such as Tongcheng Travel, Meituan-W, Ctrip Group-S, and Huazhu Group-S, which are expected to perform well in the current economic environment [7][8] - The emphasis is on sectors with strong domestic demand and those that are likely to benefit from tariff adjustments, indicating a favorable investment outlook [7][8]