China Consumer_Spring Festival_ Green shoots amid moderation

Summary of Key Points from the Equity Research Report Industry Overview - Tourism: Strong passenger traffic with over 2.3 billion inter-regional trips during the Spring Festival holiday, a slight increase from 2.29 billion the previous year. Domestic trips reached 501 million, up 5.9% year-on-year, generating RMB 677 billion in travel revenue, a 7% increase year-on-year, with an average spending per trip of RMB 1,351, up 1% year-on-year. Inbound tourism spending increased 1.5 times year-on-year in the first five days of the holiday due to relaxed visa policies [3][10] - Home Appliances: Benefiting from a trade-in policy, with 1.793 million traded-in home appliances sold in January 2025. Sales of home appliances and communication equipment grew by over 10% year-on-year during the first four days of the CNY holiday [4][10] - Baijiu: Demand improved sequentially compared to the last Mid-Autumn Festival, with an expected low-teen percentage decline in overall sell-through during the CNY holiday. Moutai's wholesale price remained stable at approximately RMB 2,250 per bottle, while Wuliangye's price rebounded to RMB 930 per bottle due to tight supply [5][10] - Food Industry: The dairy sector is expected to see a slight decline in sell-through but significant price improvements due to low inventory. Catering is experiencing mild recovery, while beer and soft beverage sales are relatively insignificant due to off-season [6][10] Company Insights - Ninebot (689009 CH): Rated Buy with a target price of RMB 57.00, indicating an 11% upside. The company is expected to benefit from increased subsidies for electric two-wheelers in 2025, enhancing overall sales [7][34] - Midea (000333 CH/300 HK): Rated Buy with a target price of RMB 91.00 for A-shares and HKD 98.00 for H-shares, implying approximately 23% and 31% upside, respectively. The company is expected to continue benefiting from the trade-in policy and upcoming high season starting in March [7][34] - Fen Wine (600809 CH): Rated Buy with a target price of RMB 237.00, suggesting a 37.8% upside. The company is expected to achieve above-industry average earnings growth in 2025, driven by the expansion of light aroma baijiu and improving momentum of the Qinghua brand [7][34] Valuation Metrics - Baijiu Sector: Trading at a 17x 12-month forward PE, below its historical average [13] - Beer Sector: Trading at a 16x 12-month forward PE, approximately 2.0 standard deviations below its historical average [15] - Dairy Sector: Trading at a 15x 12-month forward PE, about 1.0 standard deviation below its historical average [17] - Food Sector: Trading at a 22x 12-month forward PE, below its historical average [23] - Home Appliances Sector: Trading at a 13x 12-month forward PE, below its historical average [29] - Hotel and Travel Sector: Trading at a 14x 12-month forward PE, approximately 1 standard deviation below its historical average [31] Risks and Catalysts - Ninebot: Risks include uncertainties regarding e2W standards in China, weaker-than-expected overseas demand, and competition. Catalysts include preliminary results announcements and new product launches [34] - Fen Wine: Risks include macroeconomic slowdown and changes in consumer preferences. Catalysts include the recovery of demand for baijiu and market expansion [34] - Midea: Risks include weaker-than-expected policy impacts on household appliance sales and rising raw material costs. Catalysts include continuous sales growth driven by subsidy policies [34]