Core Viewpoint - Energy conservation and efficiency enhancement have become strategic choices for sustainable economic development and the future of humanity in the context of severe global climate change and accelerated energy structure transformation [1][2]. Group 1: Energy Consumption and Challenges - In 2024, China's primary energy consumption reached 5.96 billion tons of standard coal, with oil and natural gas import rates exceeding 70% and 40% respectively, indicating increasing energy security risks [2]. - Energy consumption intensity in China decreased by 3.8% year-on-year in 2024, with a cumulative reduction of 11.6% over the first four years of the 14th Five-Year Plan, meeting the planned target timeline [2]. Group 2: Policy Initiatives and Economic Impact - A new round of large-scale equipment updates and consumer product replacements was initiated in 2024, with the aim of enhancing technology, energy consumption, and emissions standards [3]. - By May 31, 2025, the old-for-new consumer goods program generated sales of 1.1 trillion yuan, with approximately 175 million subsidies issued to consumers [4]. - Investment in equipment and tools grew by 15.7% in 2024, contributing 2.2 percentage points to overall investment growth [4]. Group 3: Industry Upgrades and Green Transformation - The "Two New" policy has significantly stimulated production growth in the equipment manufacturing and consumer goods sectors, with the equipment manufacturing industry's added value increasing by 7.7% in 2024 [5]. - The implementation of the "Two New" standards has led to the release of 168 important standards related to energy consumption and pollutant emissions [5]. - The estimated energy savings from the "Two New" policy in 2024 amounted to approximately 28 million tons of standard coal, resulting in a reduction of about 73 million tons of carbon dioxide emissions [5]. Group 4: Future Outlook - To build a modernized nation and ensure energy security, China must adhere to a priority on energy conservation, aiming for a comprehensive transition from energy consumption control to carbon emission control by 2030 [6]. - The contribution of energy conservation to the reduction of carbon emission intensity during the 14th Five-Year Plan period is projected to be around 50%, serving as a crucial support for achieving carbon peak and carbon neutrality goals [6].

Investment Rating - The report suggests a positive outlook for the consumer sector, indicating a potential recovery and valuation improvement in the industry [3][4]. Core Insights - The consumer sector showed mixed performance in the week of May 19-23, with notable gains in home appliances and textiles, while food and beverage sectors experienced declines. The Shanghai Composite Index fell by 0.18% during this period [4]. - In April, retail sales increased by 5.1% year-on-year, with significant growth in optional consumption and durable goods. The report highlights that essential consumption, particularly in grain and oil products, maintained high growth rates [4]. - The cleaning appliance market remains robust, with significant sales growth in robotic vacuums and floor washers, indicating a trend towards premiumization and market expansion driven by technological advancements [4]. Market Weekly Review - The consumer sector's weekly performance varied, with home appliances up by 1.21% and food and beverage down by 1.27%. Key stocks that surged included Kuaijishan (+31.37%) and Liren Lizhuang (+53.87%), while stocks like Anji Food (-10.29%) and Huafang Co. (-23.78%) faced declines [4][14][15]. - April's retail sales data showed a 5.1% year-on-year increase, with essential goods like grain and oil growing by 14.0%, and optional goods like cosmetics and jewelry seeing increases of 7.2% and 25.3%, respectively [4][16]. Industry News and Key Company Announcements - The Ministry of Commerce reported that retail sales of home appliances have seen double-digit growth for eight consecutive months, with a 38.8% year-on-year increase in April [16]. - Various cities are implementing policies to boost consumer spending, including subsidies for purchasing home appliances and digital products [17][18]. - Companies like Midea and Hisense are making strategic moves, with Midea's former executive joining Hisense to lead air conditioning business development [19][20].