China Galaxy Securities: The importance of policies to boost consumption highlights the focus on high-quality companies with high dividend rates

The Zhitong Finance App learned that China Galaxy Securities released a research report saying that the consumer industry needs to pay attention to the medium- to long-term consumption goals in the “15th Five-Year Plan”; in the short term, focus on implementing specific policies related to consumption in 2026. I am optimistic about the development of overseas business in the consumer industry in 2026. In terms of individual consumer stocks, focus on high-quality companies with high dividend rates in the process of market style switching (high cut and low), as well as companies with alpha in each segment.

The main views of China Galaxy Securities are as follows:

Boosting consumption is system engineering, and service consumption is receiving more attention

1) Global consumption is recovering slowly. High tariffs are driving up prices and high interest rates suppressing demand for credit, thereby suppressing consumption. Combined with weak job markets, consumer confidence in Europe and the US is recovering slowly. 2) The Central Economic Work Conference proposed adhering to domestic demand leadership and building a strong domestic market. Deeply implement special actions to boost consumption, and formulate and implement plans to increase the income of urban and rural residents. Expand the supply of quality goods and services. Optimize the implementation of the “two new” policies. 3) Compared with commodity consumption, the bank is more optimistic about service consumption improvement expectations. Recently, relevant policies have placed a marked increase in emphasis on service consumption. In particular, cleaning up unreasonable restrictions in the consumer sector is an effective way to release demand for service consumption, and it is expected to gradually pay off.

In terms of domestic demand, the decline in national supplements is gradually reflected, and the zero growth rate of social security continues to slow

1) November was zero YoY +1.3%, and the growth rate was -1.6 pct. Since May, the growth rate has declined month-on-month. 2) Under the decline of the national supplement, household appliances and audiovisual equipment companies were zero YoY -14.6%/-19.4%, and the year-on-year ratio was +18.9%/-1.5%, respectively; in September 2024, the implementation of the home appliance industry was strong and immediate. The execution of other consumer segments clearly lagged behind that of home appliances, which led to a significant decline; in 10/11, furniture companies (including electric bicycles and wearable smart devices) were +7.4% YoY/+7.4% -0.8%, and it also began to weaken. In October/November, cultural and office supplies (including computers) companies were zero YoY +13.5%/+11.7%, and communication equipment companies were zero YoY +23.2%/+20.6%. Since the 3C digital product subsidy policy was optimized in early 2025, the pressure is expected to be in early 2026.

By category, the gold and silver jewelry category is affected by the new value-added tax policy, and textile clothing, cosmetics, and catering have maintained steady growth

1) In October-November, the Gold and Silver Jewelry Association had zero sharp growth of 37.6%/8.5%. The “Notice on Tax Policies Related to Gold”, which was implemented on November 1, 2025, has had an impact on the increase in value-added tax costs for gold jewelry. In October/November, the CPI rose 0.2%/0.7% year on year and continued to improve. Among them, the sharp increase in the price of gold jewelry played an important role. 2) In October/November, clothing, footwear, and knitwear and textile companies had a zero year-on-year ratio of +6.3%/+3.5%. The growth rate was relatively stable against the backdrop of colder weather in the north. 3) The zero growth rate of cosmetics companies is also gradually improving. Compared with the same period in 10/11, +9.6%/+6.1%, the Double Eleven promotion had a certain effect. 4) In October/November, restaurant companies showed zero year-on-year ratio of +3.8%/+3.2%. The growth was not fast, and the victory was stable in the context of takeout subsidies.

From a global perspective, Europe and the US are not very willing to spend, and the Black Friday performance is average

1) In an environment of weak job markets, high tariffs and high interest rates, European and American consumer confidence is slowly picking up. The US consumer confidence index released by the University of Michigan in December 2025 was 53.3 (close to the bottom of history, mostly 70-90 in normal years); the EU consumer confidence index released by Eurostat in November 2025 was -13.6 (at a relatively low level, generally reflecting moderate optimism at -10 to 0). The overall performance of US retail sales was lackluster. After the September seasonal adjustment, retail sales were +3.9% year-on-year, and the growth rate declined from August. 2) Online weekly online sales increased by single digits in 2025. According to Adobe data, the overall year-on-year ratio of Internet Week (Thanksgiving to Internet 1) was +7.7%. Among them, Black 5 and Internet 1 days were +9.3% and +7.1% respectively compared to last year's shopping festival day, with average performance. Furthermore, the promotion cycle has been lengthened, and participation in e-commerce has increased, and competition in the US is fierce. However, some Chinese brands are rapidly growing in overseas Black Five sales. For example, Stone Technology and Chase Sweeper are performing well in the global market.

Risk Alerts

The risk of declining national subsidies; the risk of insufficient consumer demand; the risk of market competition.