Guotai Junan Securities: Durable consumer layout remains prosperous, Q1 exceeds expectations, capturing new consumption targets in the second curve

According to the Zhitong Finance APP, Guojin Securities released a research report stating that overall consumption remains weak, and the valuation of the consumer sector may face certain pressure. It is recommended to look for targets with stable Q1 performance expectations, rising ROE, continuous CAPEX growth, and a second growth curve. The urgency of "boosting domestic demand" has increased, and social security capital injection and fiscal expansion are expected to unfold in Q2, with a focus on policy-related directions such as maternal and infant care and education. The value of dividend assets is becoming prominent. Since the beginning of the year, the technology growth style has been dominant, with cumulative gains and congestion reaching high levels. Since March, technology has experienced high-level fluctuations, while undervalued dividend assets with high certainty can provide better defensiveness. In the short term, it is recommended to increase allocation to avoid volatility. The implementation of AI technology is still unfolding, transitioning from thematic investment to growth opportunities, with a focus on directions such as AI glasses and AI toys.

Guojin Securities' main viewpoints are as follows:

Consumer Macro Strategy

Domestic Demand: The manufacturing PMI index recorded 50.2% in February, indicating a significant recovery in manufacturing prosperity levels, while the service PMI recorded a slight decline at 50%. The consumer sector has not yet fully bottomed out in recovery. Since September 2024, the intensity of national subsidies has been continuously increasing, and the effect of stimulating residents' consumption willingness is becoming evident. Moreover, subsidies are provided according to provinces, with the possibility of policy expansion in the future. With social security capital injection and fiscal expansion, residents' disposable income and consumption willingness are expected to see some recovery. It is recommended to look for high-dividend defensive consumer companies in sectors such as maternal and infant education with stable Q1 performance expectations.

Exports: The U.S. PCE remains high, and interest rate cut expectations continue to be delayed. The U.S. core PCE price index in February increased by 2.8% year-on-year, maintaining a high level. Although domestic inflation risks remain, there is still a possibility that the U.S. will continue to impose additional tariffs on China, which will have a significant impact on exports in the short term. It is recommended to look for companies with the ability to expand into new markets and new consumption, and that are likely to build a second growth curve.

Industry Prosperity Tracking

Home Appliances: ① White goods production in April: The total production of the three major white goods reached 39.59 million units in April, a year-on-year increase of 4.3%. In April, air conditioner domestic sales/export production was 13.42 million/10.58 million units, up 9.1%/7.5% year-on-year; refrigerator domestic sales/export production was 3.23 million/4.86 million units, down 12.6%/up 5.3% year-on-year; washing machine domestic sales/export production was 3.80 million/3.60 million units, down 2.3%/up 1.5% year-on-year. ② Home appliance exports in February: Air conditioner exports from January to February increased by 20% year-on-year, with February exports alone up 56%. Europe and South America increased by 63% and 58% year-on-year, while Africa and Southeast Asia increased by 43% and 36% year-on-year; refrigerator exports from January to February increased by 11% year-on-year, with February exports alone up 12%. South America and Africa increased by 32% and 10% year-on-year, while North America increased by 6%; washing machine exports from January to February increased by 9% year-on-year.

Light Industry Manufacturing: ① New tobacco: The U.S. Senate has officially approved the appointment of the new FDA director, who may focus more on strict enforcement against illegal products. ② Light industry consumption: Continued attention to the momentum of domestic brands, with Zhongchong Wanpi launching new baking products highlighting pricing advantages. ③ Home furnishings: Looking forward to more regional consumption subsidies being implemented in the future. ④ Two-wheeled vehicles (upward turning point): The average replacement speed for old-for-new exchanges has accelerated month-on-month, with leading data in the second quarter continuing to exceed expectations and accelerate realization ⑤ AI Glasses: Recently, major companies have been gradually entering the AI glasses market, and the industry trend is clear.

Textiles and Apparel: ① In the branded apparel sector, the sales of clothing in January-February showed a slight improvement compared to 24H2, but the industry beta still faces significant uncertainty due to abnormal weather. ② In the textile manufacturing sector, China's overall exports grew by 2.3% in January-February 2025, with export growth through trade transfer continuing, and clothing exports are expected to benefit.

Social Services: Under the catalysis of policies to boost consumption and encourage childbirth, the recent consumption market has warmed up, with Hong Kong's new consumption stocks performing particularly well. Dining: Improved base + easing of price wars, with some categories/brands seeing improvements in same-store year-on-year or narrowing declines. Human Resources: Several companies have integrated DeepSeek, which is expected to improve recruitment matching efficiency. Education: The K12 sector remains prosperous. Attention should be paid to marginal changes in the competitive landscape and the balance between expansion and profitability.

Commerce and Retail: Meituan's food delivery and flash purchase services achieved steady growth, strengthening protections for merchants and delivery riders. Kuaishou's core business remains stable, and AI monetization has begun.

Risk Warning

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