Cathay Pacific Haitong: Consumption is in the rebound phase driven by valuation and transaction structures, the structural chance is greater than the total

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that consumption is currently in a rebound phase driven by valuation and transaction structures. If the current situation is maintained at the macro level, the consumer investment logic will mainly be: 1) share increase, profit distribution in the industrial chain to support stable cash flow and high shareholder returns; 2) penetration rate opportunities are scarce, but there are obvious surpluses, and small to medium market capitalization will be the main focus. If macro-level improvements are made, leading consumers of options and services will have greater flexibility and significant excess returns.

Cathay Pacific Haitong's main views are as follows:

The valuation and transaction structure supports a rebound, and the reversal requires waiting for the macroeconomic climate to reach the standard

① This paper constructs a consumption analysis framework with macro health H and profitability E as thresholds, valuation V, transaction structure P as catalysts, and correction factor S. ② Macro determines direction, profit determines sustainability, and valuation and transaction structure determine stock price flexibility: 1) Macro sentiment and excess returns are not monotonous. High macro prosperity is often accompanied by high valuations and trading congestion, reducing excess returns; 2) Valuation only has a high win rate when the macro boom is good. 3) The trading structure provides additional flexibility under high macroeconomic conditions. ③ Under the above evaluation system, the current consumer sector valuation and transaction structure supports a rebound.

Historical review: Excess consumption of A-shares was concentrated in two segments, and the leaders did not always outperform

① The excess came from two market segments: the cumulative excess from 2000 to 2026 was about 110 pcts, with an average annual average of only 1.0 pct; contribution of +67.4 pct from November 2008 to July 2012; contribution of +63.3 pct from February 2016 to February 2021; retracted 65.6 pct and 39.5 pct from 2006 to 2007 and 2021-2026. ② The rise in A-share consumption is divided into three categories: 1) profit-driven and most sustainable; 2) valuation-driven reliance on liquidity; 3) defensive only relatively resistant to decline, and absolute returns are not necessarily positive. ③ The decline was due to shrinking valuations and deteriorating profits. From 2021 to 2024, PE fell from 43.0 times to 20.8 times, and the valuation was digested; after December 2024, it turned negative compared to EPS, and exceeded the amount by 39.5 pct since 2021. ④ Compared with the seven major industries, the market capitalization weighted index is not high for a long time; the leaders are not the benchmark for overall performance; the excess is concentrated in 2007-2012 and 2015-2021.

Valuation is fragmented rather than completely undervalued, and structural opportunities are greater than total opportunities

① Macro sentiment is weak, and credit/confidence/inflation/housing prices have not met the threshold. ② The valuation is cheap but differentiated: consumption PE is 22.5 times, 27.4% quantile, compared to PE 1.63 times and 9.5% fraction, PB 2.77 times, 2.5% fraction; food, beverage, beauty care are low, and social services and light industry are not cheap. ③ The transaction structure is not crowded; active equity fund spending is at a low level in nearly ten years; the consumer transaction office is at 5% in history. Low transactions limit downside, and are also prone to downside when there is no catalyst. ③ The inflection point depends on profit: in 2026, the EPS growth rate compared to the Shanghai and Shenzhen 300 EPS rate is 28.2%, which is 4% since 2010. ④ The US and Japan experience: The US must choose excess is concentrated during the recession and inflationary shock period, and the expansion period instead fails; Japan's must-choose only has a safe-haven effect, and re-inflation did not bring excess. The excess mainly comes from overseas travel and service. The long-term excess center of A-shares may move downward. More opportunities come from increased share, service penetration, and overseas revenue.

Risk warning: Revenue recovery falls short of expectations, reversal of channel dividends and profit redistribution, and data caliber errors, leading to deviations in valuation and transaction structure signals, and incomplete evaluation systems.