中国消费市场-2025 年第三季度总结_整体需求趋弱，前景仍谨慎；高端消费成亮点-China Consumer_ Pulse Check_ 3Q25 wrap-up_ Overall demand softer and outlook remains prudent; high-end consumption a bright spot

Summary of China Consumer Pulse Check: 3Q25 Industry Overview - The report focuses on the China Consumer sector, highlighting softer consumption trends in 3Q25 across various industries including spirits, sportswear, cosmetics, and dairy [2][12]. Key Findings - Overall Demand: Consumption trends have softened, with earnings misses and growth deceleration noted in multiple sectors. Home appliances, despite benefiting from trade-in policies, also experienced a deceleration due to tougher comparisons and subsidy controls [2][12]. - Peak Season Performance: Goods consumption during peak seasons, such as the National Day holiday and Double 11, was weaker than expected, indicating a broader trend of demand softness [2][12]. - Price Pressure: The softness in demand has continued to pressure prices in categories like sportswear, spirits, and dairy. However, some players in prepared food and air conditioning are becoming more disciplined in their promotions due to limited economic value [2][12]. - Bright Spots: Some multinational corporations, particularly in the premium segments like luxury goods and cosmetics, reported signs of improvement in trends, attributed to wealth effects, foreign exchange impacts, easier comparisons, and improved operations [2][12]. - Cautious Outlook: Despite some positive signs, the overall outlook remains cautious due to broad-based softness observed in 3Q results and deteriorating macro data related to consumption [2][12]. Sector Preferences - Preferred Sectors: The most preferred sectors identified are diversified retailers, beverages, and pet food. The apparel and footwear OEM sector preference has been lifted to Neutral from least preferred due to easing tariff uncertainties [3][12]. - Least Preferred Sectors: The least preferred sectors include sports retailers, furniture, projectors, discretionary small kitchen appliances, and non-super-premium spirits [3][12]. Investment Focus - The report emphasizes focusing on companies with idiosyncratic growth opportunities, particularly in the new consumption space, despite softening sentiment due to brand cycles and base concerns. Companies with high shareholder returns and market share efficiency are viewed as more defensive in the current consumption backdrop [2][12]. Additional Insights - Earnings Visibility: Companies with relatively high earnings visibility into the next year, such as those driven by store and category expansion in freshly made drinks, are highlighted as potential investment opportunities [2][12]. - Market Dynamics: The report notes that while some sectors are facing challenges, there are still opportunities for growth in niche and premium brands, which are expected to outperform the broader industry despite a likely slowdown compared to the first half of the year [12][14]. Conclusion - The overall sentiment in the China consumer market for 3Q25 indicates a cautious approach due to softer demand trends, with specific sectors showing resilience and potential for growth. Investors are advised to focus on companies with strong fundamentals and growth visibility while remaining aware of the broader economic challenges.