Guotai Junan Securities: The recovery of domestic demand for consumer discretionary goods continues, firmly optimistic about the direction of fiscal subsidies

According to the Zhitong Finance APP, Guojin Securities released a research report stating that the evolution of domestic and foreign demand in 2025 is uncertain, influenced by external macro variables such as domestic fiscal subsidies and overseas Trump trade policies. Therefore, grasping the structure and rhythm is particularly important. The valuation levels and institutional holdings in the consumer discretionary sector are already at historically low levels. Coupled with the stabilization of domestic demand releasing market liquidity, the strategic outlook remains bullish, with a focus on tactical allocation.

The main points from Guojin Securities are as follows:

Domestic Demand: Demand continues to recover, expecting policy support.

In November, the manufacturing PMI rose to 50.3, showing the effects of the current growth stabilization policies gradually emerging; the services PMI recorded 50.1, unchanged from last month. Benefiting from the Double Eleven shopping festival, information technology services/postal services are in a prosperous range, while road transportation/accommodation/restaurants have slightly adjusted. The economic recovery trend in the fourth quarter is clear, with short-term attention on the central economic work conference guidance in mid-December, expecting stimulus policies to continue to strengthen.

Exports: US inflation rises, interest rate cut pace slows.

The US CPI in October recorded 2.6%, an increase of 0.2 percentage points from the previous month, marking the first rise in the past seven months. It is expected that the fiscal expansion and tariff increase policies adopted after Trump took office will further push up inflation, putting pressure on the dollar's interest rate cuts, and increasing uncertainty in export and overseas directions. According to Fedwatch tracking, the probability of an interest rate cut at the December meeting is about 75.1%.

Industry Prosperity Tracking

Light Industry Manufacturing: ① Home Furnishing: The expansion of the national furniture subsidy scope and simplification of processes remain the main themes; US "Black Friday" online shopping total increased by 10.2% year-on-year. ② New Tobacco: 1) The US Supreme Court will recently hear the flavored e-cigarette ban case; 2) British American Tobacco's HNB new products glo Hilo and Hilo plus have been launched in Serbia. ③ Paper Making: The price of double glue paper increased by 100 yuan, while other paper types remained stable compared to last week. ④ Two-Wheeled Vehicles: A total of 505,700 electric bicycles were collected and replaced nationwide, driving new car sales of 1.29 billion yuan.

Textiles and Apparel: Recent significant cooling in temperature, with demand that was delayed in November due to warmer weather expected to explode, coupled with the earlier timing of the Spring Festival in 2025, the clothing sales peak season is expected to arrive early.

Social Services: ① Education & Human Services: The Ministry of Education issued a notice on strengthening artificial intelligence education in primary and secondary schools. ② Travel Chain: 1) Tourism: The scope of visa-free countries for entry has expanded, with the stay period extended to 30 days. 2) Hotels: The trend of RevPAR improvement is confirmed under a low base in Q4, and the supply-demand pattern is expected to continue to improve.

Home Appliances: ① AVC: The online market retail volume and retail value of seven major categories increased by 7.6% and 15.3% year-on-year, respectively. ② Industrial Online: In December, the total production of white goods reached 33.98 million units, a year-on-year increase of 21.7%, with a slight acceleration compared to the previous month.

Beauty and Personal Care: ① Trendy Play: The "millet economy" has received widespread market attention. ② Cosmetics: In November, Han Shu topped the Douyin list, with Proya/Kefumei/Mao Ge Ping showing significant ranking improvements Investment Advice: The Market in 2025 May Be Divided into Two Phases

1. From the end of 2024 to the first quarter of 2025, closely follow policy guidance to focus on the most certain fiscal subsidy directions, with light allocation to fast-moving consumer goods (high valuations & upward adjusted profit expectations), the real estate chain (repair needs observation), and overseas expansion (uncertainty brought by Trump's return to power);

2. After April 2025, with domestic policies being implemented and overseas risks being released, focus on data verification and judgment, and assess the main line logic for the second half of the year based on scenario analysis.

Current recommended ranking: two-wheeled vehicles, home furnishings, branded apparel, tourism > consumption dividends > overseas alpha targets (e-cigarettes, sports OEM)

Risk Warning: Policy implementation may fall short of expectations; overseas economic fluctuations; market volatility risks; data tracking errors