Summary of the Conference Call Company and Industry Overview - The conference call involved **Miao Exhibition**, a leading company in the exhibition industry, particularly in overseas exhibitions. The discussion highlighted the challenges and opportunities within the **service consumption sector**, specifically focusing on the exhibition segment, which is considered a significant part of this industry [1][3]. Key Points and Arguments 1. **Economic Environment and Financial Performance**: - The overall economic environment has been challenging, leading to a slight increase in revenue but a significant decline in profit. The company reported a profit drop of over 20% when excluding non-recurring items, indicating that revenue growth does not directly translate to profit growth [3][4]. - The gross margin decreased by over 2 percentage points, reflecting the difficulties in maintaining profitability despite revenue increases [4]. 2. **AI Exhibition Launch**: - In January, the company launched an **AI Exhibition**, upgrading its previous digital exhibition services. This upgrade included significant software enhancements and the introduction of hardware like VR glasses. However, the sales performance in this area was not ideal due to delays in completing all functionalities until mid-year [4][5]. 3. **Industrial Exhibition in Indonesia**: - The company hosted an industrial exhibition in Indonesia in June, which saw a significant increase in the number of exhibition booths from 500 to nearly 1200, indicating strong growth potential in this sector [6][7]. - A new exhibition model was introduced, utilizing a "wolf-sheep" theory to attract buyers and sellers, enhancing the effectiveness of the exhibition [7][9]. 4. **Market Expansion and Future Prospects**: - The company is focusing on the industrial machinery sector, which is expected to grow rapidly, particularly in the context of China's foreign trade [6][10]. - The company plans to leverage its recent listing on the Hong Kong Stock Exchange to enhance its international market presence and capitalize on the growing demand for exhibitions in emerging markets [10][11]. 5. **Geopolitical Risks**: - The ongoing geopolitical tensions, particularly between the U.S. and Iran, pose significant risks to the company's operations in the Middle East. The potential for prolonged conflict could severely impact exhibition attendance and revenue [24][30]. - The company is monitoring the situation closely, with contingency plans in place should the conflict escalate [24][33]. 6. **Government Support and Subsidies**: - There is limited government support for exhibition companies compared to domestic events, where subsidies are more common. The focus is primarily on supporting participating enterprises rather than the exhibition companies themselves [39][40]. - The overall subsidy landscape is stable, with some adjustments based on geopolitical factors and market conditions [41][42]. 7. **Future Events and Strategic Adjustments**: - The company is preparing for upcoming exhibitions, including a major event in Dubai, while also considering the implications of current geopolitical tensions on attendance and participation [26][30]. - There is a recognition of the need to adapt to changing market conditions, including the potential for online exhibitions if necessary [37][38]. Additional Important Content - The company has established a supply chain company to address challenges faced by small buyers in developing countries, facilitating their ability to purchase products showcased at exhibitions [14][16]. - The recent exhibition in Saudi Arabia set a record with over 1500 booths, indicating strong market potential in the region [17][18]. - The company is exploring the possibility of online exhibitions as a contingency plan, although it acknowledges the challenges in achieving the same scale and profitability as physical events [37][38].

Core Viewpoint - The article discusses the release of a policy document aimed at promoting travel service exports and expanding inbound consumption in China, highlighting the importance of inbound tourism as a significant growth area for service trade [1][2]. Group 1: Policy Measures - The policy document outlines 16 measures across seven areas, including expanding inbound tourism consumption, facilitating inbound business activities, and enhancing various consumption scenarios such as health and education [1]. - The measures focus on increasing the supply of quality services, such as enriching inbound travel product offerings and optimizing the approval management for foreign performances [2]. - New initiatives include exploring the establishment of international medical tourism clusters and allowing the use of urgently needed foreign medical products in designated areas [2]. Group 2: Consumption Growth Projections - By 2025, the number of inbound foreign tourists is projected to reach 35.17 million, representing a 30.5% increase from 2024 [1]. - The export scale of travel services is expected to reach 393.98 billion RMB by 2025, marking a 49.5% year-on-year growth and 1.6 times that of 2019 [1]. Group 3: Consumer Experience Enhancements - The policy aims to improve the overall consumer experience for international travelers through various measures, including optimizing tax refund services and enhancing payment convenience [3]. - Efforts will be made to improve communication services and provide multilingual support in key tourist areas to facilitate better experiences for foreign visitors [3]. - The document emphasizes the need for coordinated efforts across multiple sectors and departments to create a globally attractive international consumption environment [3].

Core Insights - The report highlights the resilience and potential growth in various sectors, particularly in transportation, petrochemicals, and education, driven by geopolitical factors and policy support [2][3][5]. Transportation Industry - The transportation sector is expected to experience significant elasticity post-Hormuz Strait disruptions, with long-term impacts on oil tankers, bulk carriers, container ships, and shipbuilding [2][10]. - Geopolitical tensions are driving oil prices higher, with Brent crude projected to range between $80 and $150 per barrel in 2026, leading to a supply-demand gap of approximately 7.4 million barrels per day [10][11]. - Key investment targets include shipping companies like China Merchants Energy and COSCO Shipping, as well as shipbuilding firms [10]. Petrochemical Industry - The petrochemical sector is witnessing increased upstream elasticity due to geopolitical conflicts, with oil companies expected to benefit from sustained high oil prices [2][13]. - Refining costs are rising, prompting a shift in global refining capacity, with domestic refiners likely to gain a competitive edge due to stable supply chains [11][13]. - Investment recommendations focus on major oil companies and firms involved in petrochemical production, such as CNOOC and Sinopec [13]. Education Industry - The education sector is poised for growth, driven by a surge in demand for vocational training among youth and supportive policies aimed at improving higher education quality [3][14]. - The K12 training market is transitioning from a fully market-driven model to a regulated one, with significant capacity expansion expected among compliant institutions [14]. - Recommended companies include China Oriental Education and New Oriental, which are well-positioned to capitalize on the sector's recovery [14].

Core Viewpoint - The escalation of the Middle East conflict has significantly impacted global supply chains, including those in China, leading to factory shutdowns, order delays, and cancellations of trade exhibitions [3][4]. Group 1: Impact on Manufacturing and Supply Chains - Manufacturers are experiencing a halt in production and order acceptance due to skyrocketing raw material prices, which have increased by approximately 40% since March [4][6]. - Companies are prioritizing existing orders from long-term clients while new orders are on hold, as suppliers are unable to provide stable pricing for raw materials [4][6]. - The uncertainty in raw material pricing is causing manufacturers to consider price increases for their products if the situation does not stabilize by the end of March [4][6]. Group 2: Trade Exhibitions and Market Expansion - Trade exhibitions in the Middle East have been largely canceled or postponed due to safety concerns and logistical challenges, affecting companies' market expansion efforts [8][9]. - Many businesses are opting to redirect their focus to other markets, such as Southeast Asia, instead of pursuing opportunities in the Middle East [9][10]. - The cancellation of exhibitions has led to a significant increase in requests to withdraw from Middle Eastern events, with companies seeking alternatives in markets like Vietnam and Poland [9][10]. Group 3: Strategic Responses from Companies - Some companies are proactively increasing their inventory levels to mitigate the impact of supply chain disruptions, allowing them to maintain a buffer for new orders [11][12]. - Manufacturers are exploring new markets and adjusting their sales strategies to adapt to the changing landscape, with some shifting focus to trial sales in Southeast Asia [13][10]. - The recent increase in shipping costs, particularly for routes to the Persian Gulf, has been noted, with the Shanghai export container freight index rising by 14.9% due to geopolitical tensions [13][14].

Investment Rating - The industry investment rating is "Outperform the Market" [1][29] Core Insights - The report highlights that the total retail sales in January-February 2026 increased by 2.8% year-on-year, showing an improvement from 0.9% in December 2025. The restaurant revenue grew by 4.8%, outperforming the retail goods sales [1][3] - The service sector's PMI for January and February was 49.5% and 49.7%, respectively, indicating a stable performance. The government work report suggests ongoing support for service consumption, which is expected to drive growth in the sector [1][3] - The report emphasizes the government's focus on boosting domestic demand and consumption, which is likely to enhance consumer confidence and spending capacity [1][3] Summary by Sections Domestic Macro Data - Retail sales in January-February reached 86,079 billion, with a year-on-year growth of 2.8%, an increase of 1.9 percentage points from December 2025. The growth in retail sales was influenced by the extended Spring Festival holiday [1][3] - The service sector's production index grew by 5.2% year-on-year, and the consumer confidence index stood at 90.6, indicating a gradual recovery in consumer sentiment [1][3] Investment Recommendations - The report suggests focusing on companies that are expected to benefit from the recovery in tourism and business travel, such as Lingnan Holdings and Zhongxin Tourism. Other recommended companies include Tianmu Lake, Lijiang Co., Songcheng Performance, and various hotel chains [3]

Investment Rating - The industry investment rating is "Outperform the Market" [12] Core Insights - The government work report emphasizes stabilizing growth and expanding domestic demand, which is expected to boost consumption across various sectors, particularly in social services [1][3] - The report sets a GDP growth target of 4.5%-5% for 2026, indicating a focus on enhancing consumer confidence and spending capacity through various policy measures [1][3] - The service consumption sector is anticipated to maintain strong growth due to policy incentives and structural reforms, with a notable emphasis on high-quality development in cultural tourism and related industries [1][3] Summary by Relevant Sections Government Work Report Highlights - The report outlines specific actions to stimulate consumption, including the implementation of a rural resident income increase plan and the promotion of consumer loans [6] - It mentions a special fund of 250 billion yuan to support consumption upgrades and the establishment of a 100 billion yuan financial collaboration fund to promote domestic demand [6] - The report also highlights the importance of enhancing public services and consumer rights protection to foster consumer confidence [6] Service Consumption Sector - The report indicates that the service sector's contribution to economic growth was 52.0% in 2025, with service retail sales growing by 5.5% year-on-year, outpacing goods retail sales [3][6] - The cultural tourism sector is expected to benefit from policies aimed at enhancing the quality of tourism services and expanding inbound tourism [3][6] - The report emphasizes the need for high-quality development in cultural tourism, sports events, and outdoor activities, which are projected to drive further growth in the sector [3][6] Investment Recommendations - The report suggests focusing on travel-related companies such as Tongcheng Travel, China Duty Free Group, and various hotel brands that are likely to benefit from the recovery in business travel and increased market share [3] - It also recommends leading companies in the human resources sector, such as Beijing Renhe and Foreign Service Holdings, as beneficiaries of employment-promoting policies [3] - Additionally, it highlights opportunities in the cross-border e-commerce sector and companies benefiting from the recovery of the exhibition economy [3]

Core Insights - The emphasis on developing modern service industries and leveraging cultural resources is crucial for expanding service consumption and creating new growth opportunities in China [1] Group 1: Industry Trends - There is a significant shift in consumer spending in China, moving from a focus on goods to a balanced emphasis on both goods and services, with cultural tourism, sports, and exhibitions becoming key areas for unleashing domestic demand [1] - The cultural service industry is projected to achieve a revenue of 8.58 trillion yuan by 2025, reflecting a year-on-year growth of 12.0% [1] Group 2: Integration Strategies - Effective integration of culture, commerce, tourism, sports, and exhibitions is essential, requiring deeper collaboration rather than mere co-location of services [2] - Innovative immersive experiences should be developed, such as linking museums and sports venues with commercial spaces to create thematic product lines that enhance consumer engagement [2] Group 3: Systematic Development - The integration of cultural, commercial, tourism, sports, and exhibition sectors is a complex system that requires coordinated efforts across spatial, temporal, and policy dimensions [3] - Utilizing existing resources creatively, such as transforming old factories into cultural parks and extending operational hours for venues, can enhance consumer experiences and extend consumption periods [3] - Policies should support integration projects through local government financing and encourage financial institutions to develop credit products tailored for cultural enterprises [3]

Core Insights - The emphasis on developing modern service industries and leveraging cultural resources is crucial for expanding service consumption and creating new growth opportunities in China [1] Group 1: Industry Trends - There is a significant shift in China's consumer spending from goods to a balanced focus on both goods and services, with cultural tourism, sports, and exhibitions becoming key areas for unleashing domestic demand [1] - The cultural service industry is projected to achieve a revenue of 8.58 trillion yuan by 2025, reflecting a year-on-year growth of 12.0% [1] Group 2: Integration Strategies - Integration is not merely about combining different sectors but involves mutual empowerment among industries, as seen in events like the Shanghai F1 and Beijing International Film Festival, which enhance urban comprehensive consumption [2] - To sustain this momentum, it is essential to deepen the integration from mere formality to substantive content, creating immersive experiences that connect museums, sports venues, and commercial complexes [2] Group 3: Systematic Development - The integration of culture, commerce, tourism, sports, and exhibitions requires a systematic approach, necessitating collaboration across spatial, temporal, and policy dimensions [3] - Utilizing existing resources creatively, such as transforming old factories into cultural parks and extending operational hours for venues, can enhance consumer engagement [3] - Policy support is vital, including incorporating integration projects into local government financing and encouraging financial institutions to develop suitable credit products for cultural enterprises [3]

Core Insights - The Macao SAR government announced that the total number of exhibition activities in Macao will reach 1,861 in 2025, leading to a revenue increase of approximately 6.28 billion Macao Patacas in the non-gaming sector, representing a 16.4% rise compared to 2024 [1] Group 1: Exhibition Activities - The number of exhibition activities in Macao will increase by 337 compared to 2024 [1] - Conference activities are expected to grow by 22.1% to 1,737 events, with participants increasing by 19.2% to 218,000 attendees [1] - Exhibition activities will see a 6.6% increase to 65 events, with attendance rising by 10% to 1.247 million visitors [1] - Reward activities will experience a significant growth of 47.5%, reaching 59 events [1] Group 2: Participants and Exhibitors - In 2025, the exhibition activities will gather 7,369 exhibitors and 82,241 professional visitors [1] - The number of international exhibitors and professional visitors will increase by 4.6% and 1.4%, respectively, compared to 2024 [1]

Core Viewpoint - The Guangdong-Hong Kong-Macao Greater Bay Area is focused on becoming a world-class bay area, showcasing innovation and talent, and is actively promoting international trade opportunities through initiatives like the "Global Trade of Guangdong" program [1][8]. Group 1: Trade Opportunities - The "Global Trade of Guangdong" initiative aims to enhance the influence of major trade fairs such as the Canton Fair, High-Tech Fair, and China Import and Export Fair, while also establishing overseas exhibition centers and warehouses [8]. - The Greater Bay Area serves as a base for emerging industries, advanced manufacturing, and modern services, with developed infrastructure and logistics facilitating international trade [14]. Group 2: Support for Overseas Chinese Businesspeople - Guangdong is advocating for the establishment of the "Overseas Chinese Business 'Global Trade of Guangdong' Alliance" to leverage the global presence of the overseas Chinese community and promote economic cooperation [12]. - The Canton Fair, recognized as "China's No. 1 Exhibition," has a rich history dating back to 1957 and has successfully held over 130 sessions, attracting participation from enterprises along the Belt and Road and BRICS countries [14].