01234 Overview

CMBI's Rating and Outlook: CMBI has assigned an Equalweight rating to China's discretionary consumption sector for 2026, predicting retail sales growth of about 3.5%, influenced by various economic headwinds and a cautious outlook.

Positive Factors and Stock Performance: Despite challenges, factors like the delayed Spring Festival and a recovering real estate sector may support stock prices, with expectations of pressure in the first half of 2026 and potential rebounds in the second half.

Investment Preferences: CMBI categorizes investments into survival, compensatory, and hedging/defensive consumption, recommending companies in these areas, such as LEPU BIO-B and YUM CHINA, all rated as Buy.

Large-Scale Consumption Outlook: The broker is less optimistic about large-scale consumption sectors, although favorable market conditions could enhance their performance, with companies like HAIER SMARTHOME and MIDEA GROUP also rated as Buy.