China Merchants Securities: In July, social zero increased 0.6% year-on-year, e-commerce growth remained resilient

The Zhitong Finance App learned that China Merchants Securities released a research report saying that the total retail sales of social consumer goods in July was 390.2.2 billion yuan, up 0.6% year on year; e-commerce growth remained resilient, and retail sales of online products increased 3.3% year on year in July. Service consumption continued its positive growth trend, with retail sales of services increasing by 5.0% in January-July. It is recommended to focus on leading retail companies and consumer internet leaders with excellent operating efficiency and cost-effective valuations, as well as service consumer enterprises that have benefited from an upgraded consumption structure and are resilient in growth.

The main views of China Merchants Securities are as follows:

In July, Social Zero increased 0.6% year-on-year, and retail sales of services maintained a good growth trend

Total retail sales of consumer goods in July were 390.2.2 billion yuan, up 0.6% year on year, weaker than Wind's consensus forecast of 1.3%. By type of consumption, retail sales of goods in July were 3445.5 billion yuan, up 0.5% year on year; food and beverage revenue was 456.7 billion yuan, up 1.4% year on year. Service consumption maintained a good growth trend. Retail sales of services increased by 5.0% in January-July. Among them, retail sales of travel consulting and rental services and cultural, sports and leisure services increased 11% and 10.1%, respectively, year-on-year, and continued to grow in double digits. Looking at the subregion, retail sales of urban consumer goods in July were 3378 billion yuan, up 0.5% year on year; retail sales of rural consumer goods were 524.2 billion yuan, up 1.6% year on year. The growth rate of rural consumption continued to be higher than that of urban consumption. By retail sector, retail sales of convenience stores and supermarkets among retail units above the limit from January to July increased by 6.1% and 3.8%, respectively, while retail sales of specialty stores, department stores, and brand specialty stores declined by 1.8%, 2.4%, and 9.3%, respectively. The traditional retail industry continued the trend of differentiation.

Online retail sales were +3.3% year-on-year in July, and the resilience of online consumption continued to show

Online retail sales in January-July were 7396.5 billion yuan, up 4.6% year on year. The year-on-year growth rate of online retail sales in July was +3.3%, faster than social zero market, and online consumption growth remained resilient after the big promotion. By category, the cumulative year-on-year increase of food, clothing, and consumer goods in online retail sales was 16.9%, 5.8%, and 1.1%, respectively. Online consumption of food products remained high, and online consumption of apparel grew steadily.

By category, must-choose consumption remained steady in July, optional consumption performance was divided, and the growth rate of electrified categories picked up

The essential consumer categories remained resilient. In July, retail sales of grain, oil and food products increased 5.3% year on year, tobacco and alcohol products increased 6.0% year on year, and daily necessities increased 1.8% year on year. In terms of optional consumption, demand for optional categories such as clothing, shoes and hats, cosmetics, and gold and silver jewelry declined slightly after the big promotion; while the impact of the electrified category gradually entered a normal base and raw materials for 3C digital products weakened, and the growth rate was further improved. The growth rate was further improved. The home appliance industry had zero growth rate of -1.9% and the communication equipment category +20.4%. The growth rate was higher than in June.

Investment advice: It is recommended to focus on leading retail and consumer internet leaders with excellent operating efficiency and cost-effective valuations, as well as service retail companies with growth flexibility.

Risk warning: macroeconomic risks; consumer demand recovery falls short of expectations; industry competition intensifies.