Investment Rating - The report assigns an "Outperform" rating to multiple companies including Nike, Midea Group, JD Group, Haier, Gree Electric, Anta Sports, and others, while Lulu Lemon is rated as "Neutral" [1]. Core Insights - The A/H snack and retail sectors have shown strong performance, while overseas Nike has negatively impacted sportswear performance [4][11]. - The report highlights a recovery in overseas consumer sectors and anticipates the implementation of supportive consumption policies in the A/H markets [3]. Performance Review by Sector - **Snacks**: The snack sector saw a weekly increase of 5.7%, with companies like Qiaqia Food and Three Squirrels rising by 6.0% and 7.5% respectively. The performance is attributed to seasonal sales and expectations for new products in Q1 2026 [5][13]. - **Retail**: The retail sector increased by 2.3%, driven by the rapid expansion of Wancheng Group's stores and positive same-store sales growth [6][14]. - **Overseas Cosmetics**: This sector rose by 2.4%, with notable increases from ELF Beauty and Estée Lauder [6][14]. - **Luxury Goods**: The luxury sector increased by 0.8%, with Samsonite benefiting from high-end consumer recovery [6][14]. - **Domestic Sportswear**: This sector experienced a decline of 0.3%, with Li Ning showing a 7.5% increase due to the opening of a flagship store [6][14]. - **Gold and Jewelry**: This sector fell by 1.9%, with Chow Tai Fook and other companies facing price increases and market volatility [6][14]. - **Overseas Sportswear**: This sector declined by 2.6%, primarily due to Nike's poor performance, which saw a 13.0% drop [6][14]. Valuation Analysis - The report indicates that most sectors are currently valued below their average over the past five years. For instance, the expected PE for the overseas sportswear sector is 31.2 times, which is 59% of its historical average [9][15]. - Other sectors such as domestic sportswear, gold and jewelry, and luxury goods also show lower expected PE ratios compared to their historical averages, indicating potential investment opportunities [9][15].

Investment Rating - The report assigns an "Outperform" rating to multiple companies including Nike, Midea Group, JD Group, Gree Electric, Anta Sports, and Haier Smart Home among others [1]. Core Insights - The pet and gold jewelry sectors have shown the best performance, with significant growth driven by online sales and geopolitical factors affecting gold prices [4][5]. - The report highlights a divergence in sector performance, with luxury goods and pet sectors outperforming MSCI China, while other sectors like cosmetics and sportswear are experiencing negative growth [4][10]. Sector Performance Summary - **Pet Sector**: Increased by 4.2% this week, benefiting from high online sales growth, with brands like MaiFuDi and FrieGat showing year-on-year growth of 26% and 147% respectively [5][14]. - **Luxury Goods**: Continued strong performance in gold jewelry due to rising gold prices influenced by geopolitical risks and expectations of interest rate cuts in the US [5][14]. - **Snacks**: Experienced a slight pullback after previous gains, but companies show resilience with increasing production capacity and new product placements [5][14]. - **Sportswear**: Mixed performance with local brands experiencing a downturn, while international brands like Lululemon face challenges after lowering earnings guidance [5][14]. - **Cosmetics**: Continued decline over four weeks, impacted by discussions around collagen restructuring and pressure on domestic brands [5][14]. - **US Hotels and Credit Cards**: Both sectors declined due to risk-averse market sentiment [5][14]. Valuation Analysis - Most sectors are valued below their historical averages, with expected PE ratios for 2025 indicating potential undervaluation: - Sportswear: 14.5x (72% of 5-year average) - Luxury Goods: 23.1x (65% of 5-year average) - Gambling: 14.6x (24% of 5-year average) - Cosmetics: 33.9x (84% of 5-year average) - Pet Sector: 52.6x (54% of 5-year average) - Snacks: 25.3x (39% of 5-year average) - US Hotels: 28.0x (17% of 5-year average) - Credit Cards: 31.2x (60% of 5-year average) [6][15].

Investment Rating - The report assigns an "Outperform" rating to multiple companies in the discretionary consumption sector, including Nike, Midea Group, JD Group, Gree Electric, Anta Sports, and many others [1]. Core Insights - The snacks sector has shown increased prosperity this week, with stock price volatility rising as some new consumption companies approach share release dates [4][10]. - The luxury goods sector, particularly gold and jewelry, has continued to perform well, driven by stable gold prices and brand upgrades [18]. - The sportswear sector has experienced divergence, with Lululemon's earnings slightly exceeding expectations but facing a significant stock price drop due to lowered guidance [19]. - The cosmetics sector has seen a decline, with unresolved issues affecting stock prices, while high-end international brands have performed well [19]. - Most discretionary consumption sectors are still valued below their historical five-year averages, indicating potential investment opportunities [20]. Sector Performance Review - Weekly performance rankings: Snacks > Pet > Luxury Goods > Credit Card > U.S. Hotel > Gambling > Cosmetics > Sportswear, with snacks and pet sectors outperforming the MSCI China index [14]. - Monthly performance rankings: Luxury Goods > Pet > Gambling > Credit Card > Snacks > U.S. Hotel > Cosmetics > Sportswear, with only cosmetics and sportswear underperforming [15]. - Year-to-date performance rankings: Luxury Goods > Pet > Snacks > Cosmetics > Credit Card > U.S. Hotel > Sportswear > Gambling, with luxury goods, pet, snacks, cosmetics, and credit card sectors outperforming [16]. Valuation Analysis - As of June 6, 2025, expected P/E ratios for various sectors indicate that most are below their five-year averages, with the sportswear sector at 15.5x (76% of its average), luxury goods at 21.8x (61%), and snacks at 25.7x (40%) [11][20].

Investment Rating - The report assigns an "Outperform" rating to multiple companies within the discretionary consumption sector, indicating a positive outlook for their performance relative to the market [1][3][5]. Core Insights - The pet and U.S. hotel sectors have shown the best performance this week, with valuations in most sectors still below the average of the past five years [1][4][13]. - The report highlights that the average increase for leading companies in the pet sector was 9.1%, driven by favorable trade negotiations and the commencement of the 618 pre-sale [4][15][17]. - Valuation analysis indicates that most sub-sectors are trading below their historical averages, suggesting potential investment opportunities [5][9][19]. Sector Performance Review - Weekly performance rankings: Pet > U.S. Hotel > Credit Card > Cosmetics > Gambling > Sportswear > Luxury Goods > Snacks [7][14]. - Monthly performance rankings: Pet > U.S. Hotel > Gambling > Cosmetics > Sportswear > Credit Card > Luxury Goods > Snacks [14]. - Year-to-date (YTD) performance rankings: Pet > Luxury Goods > Cosmetics > Snacks > Credit Card > U.S. Hotel > Sportswear > Gambling [14]. Valuation Analysis - As of May 16, 2025, the expected P/E ratios for various sectors are as follows: - Sportswear: 15.6x (77% of 5-year average) - Luxury Goods: 18.4x (52% of 5-year average) - Gambling: 14.2x (23% of 5-year average) - Cosmetics: 36.8x (91% of 5-year average) - Pet: 50x (51% of 5-year average) - Snacks: 24.3x (37% of 5-year average) - U.S. Hotel: 29.4x (18% of 5-year average) - Credit Card: 32x (61% of 5-year average) [5][9][18][19].