Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Retail Sales - **Date**: July 2025 - **Growth Rate**: Retail sales growth decelerated to +3.7% YoY in July, down from +4.8% in June and below the consensus estimate of +4.6% [1][3][4] Core Insights - **Demand Softness**: Ongoing demand softness is evident, with expectations of no meaningful recovery in August due to deflation and weak consumer sentiment [1][3] - **Category Performance**: - Auto sales decline contributed significantly to the slowdown, accounting for more than half of the retail sales growth deceleration [1] - Excluding auto sales, retail sales growth slowed to 4.3% YoY from 4.8% in June [1] - Home Furnishing and Home Appliances showed the most significant slowdown despite still delivering high growth [1] - Positive growth was observed in Cosmetics, Soft Drinks, and Alcohol & Tobacco, attributed to easier comparisons from June and seasonal effects [1][3] Detailed Retail Sales Trends - **Overall Retail Sales**: - July 2025: 3.7% YoY growth, down from 4.8% in June - Excluding Autos: 4.3% YoY growth, down from 4.8% in June - CAGR vs. 2019: Overall slowed to 2.7% in July from 3.8% in June [2][4] - **Category Breakdown**: - Restaurant & Dining: 1.1% YoY growth, slightly improved from 0.9% in June - Home Furnishing: 20.6% YoY growth, down from 28.7% in June - Cosmetics: 4.5% YoY growth, rebounding from a -2.3% decline in June - Electronics & Appliances: 28.7% YoY growth, down from 32.4% in June [4] Stock Implications - **Consumer Sentiment**: Remains lackluster despite a modest recovery from tariff shocks in April, with deflation and a softening property market as key drags on consumption [3] - **Investment Focus**: - High growth stocks: Pop Mart (9992.HK) and Giant Biogene (2367.HK) - Turnaround plays: Yili (600887.SS) - Resilient earnings and decent shareholder returns: YUMC (YUMC.N) and Anta (2020.HK) [3] Additional Insights - **CAGR Trends**: Overall momentum across most categories worsened, indicating a broader trend of slowing consumer spending [2] - **Policy Impact**: Consumption-supportive policies could provide some support to demand sentiment moving forward [3] This summary encapsulates the key points from the conference call regarding the current state of the retail industry in China, highlighting the deceleration in growth, category performance, and implications for investment strategies.