China Securities Co., Ltd.: Medical aesthetics is expected to have high elasticity, and the demand for gold terminal is about to rise.

China Securities Co., Ltd. released a research report stating that medical beauty is expected to have high elasticity in the context of consumer recovery, with continuous release of new products and certification expectations still dominating expectations. Mature products and channels are both experiencing noticeable slowdowns, with some expected marginal improvement next year. The industry logic is more inclined towards product life cycle, with growth, pipeline, and niche tracks directly related. The cyclicality of individual stocks is also more identifiable. The imminent rise in demand for gold terminals, combined with continued strong interest in consumption, indicates a positive outlook. The short-term upward trend in gold prices is expected to end, with consumers gradually accepting psychological barrier levels and suppressed terminal demand potentially starting up. Younger generations remain enthusiastic about trendy IP products, with brand strategies for overseas expansion continuing to unleash potential. The efficiency of cosmetics operations will determine the trend of ROE, with expectations of increased utilization of excellent capital levels. The difference in gross sales reflects to a certain extent the brand lifecycle, but the narrowing of this indicator across the industry is more of a common trend resulting from changes in channel flow, and with healthy asset turnover, ROE can still see growth. Niche markets can achieve higher profit levels, and mass market brands, through increased channeling, can also achieve higher turnovers. Industry-wide cash flows are generally excellent, with some expectations for consolidation and overseas expansion in the coming year. In the hotel and catering industry, the speed of industry supply optimization is expected to be fast, with competition intensifying among leading hotel groups, and trends of UE verification accelerating in the middle and high-end matrix. The focus is on high-end and above brand models in top-tier cities, as well as the pace of submerging mid-range and below brands, the increase in leisure vacation demand bringing localized characteristics and operational logic to assets. The catering sector has seen a large influx of supply in the past two years but is gradually becoming rational, with supply optimization still requiring some time. It is anticipated that as the cycle progresses, leading companies will see a significant increase in scale, gradual validation of overseas models, and fine operations of multiple brands, potential stabilization of industry profitability, and attention to changes in industry competition. Compared to developed markets, leading companies in the sector may achieve better capital market performance once the cycle progresses. Short-term attention should be paid to the elasticity of consumption stimulation. In duty-free retail, leading companies have clear advantages, with supply-side optimization mainly focusing on product richness, brand culture excavation, the construction of quality property scenarios, and enhanced channel brand overall. Development breakthroughs focus on deep cultivation of members, overseas expansion, and industry chain integration flexibility brought by quality cash flows. Short-term attention should be paid to the incremental improvement in consumption ability of main customer groups stimulated by consumption-promoting policies. In the tourism and OTA sectors, supply optimization advantages in tourism are still focused on top-tier scenic spots, with a direction primarily focusing on product, technology, and scene upgrades, while aligning with policy directions for the improvement of tourism facilities. For example, development in transportation, enhancement of technology attributes, low-altitude and ice and snow tourism, etc. Hierarchical tourism consumption demonstrates the resilience and bargaining power of key scenic spots and leisure entertainment formats. Attention should be paid to the potential marginal improvement in consumption willingness due to holiday policies, the elasticity of inbound and outbound travel recovery, etc.; leading companies in the OTA sector have competitive advantages, with growth mainly relying on increasing online penetration rates. The direction of supply optimization has shifted from competition for high-frequency resources to the enhancement of quality of custom tour products with higher value, while relying on flow extension services and other businesses within the industry chain. In the gaming sector, the combination of supply and the demand resilience attributable to high-quality outbound tourism destinations, industry stability, profitability, and high-quality cash flow, under a future logic leaning towards stockpile operation. Supply optimization mainly focuses on the construction and cultivation of core properties, refinements in operations, and overseas development. Short-term attention is paid to the continued advancement of the Hainan-Hong Kong-Macao policy and developments beyond gaming. The efficiency of cosmetics operations will determine the trend of ROE, with expectations of increased utilization of excellent capital levels. The difference in gross sales reflects to a certain extent the brand lifecycle, but the narrowing of this indicator across the industry is more of a common trend resulting from changes in channel flow, and with healthy asset turnover, ROE can still see growth. Niche markets can achieve higher profit levels, and mass market brands, through increased channeling, can also achieve higher turnovers. Industry-wide cash flows are generally excellent, with some expectations for consolidation and overseas expansion in the coming year. Medical beauty is expected to have high elasticity in the context of consumer recovery, with continuous release of new products and certification expectations still dominating expectations. Mature products and channels are both experiencing noticeable slowdowns, with some expected marginal improvement next year. The industry logic is more inclined towards product life cycle, with growth, pipeline, and niche tracks directly related. The cyclicality of individual stocks is also more identifiable. Supermarkets and department stores should pay attention to inflation expectations and potential for mergers and reorganizations. There are signs of a rebound in consumption recently, with active fiscal policies likely to result in sustained improvement in demand-side, subsequently driving up the consumer price index, with supermarkets and catering businesses displaying high elasticity. Companies with financial strength and willingness to transform under the background of mergers and reorganizations are also worth keeping an eye on. The imminent rise in demand for gold terminals, combined with continued strong interest in consumption, indicates a positive outlook. The short-term upward trend in gold prices is expected to end, with consumers gradually accepting psychological barrier levels and suppressed terminal demand potentially starting up. Younger generations remain enthusiastic about trendy IP products, with brand strategies for overseas expansion continuing to unleash potential. Cross-border e-commerce: Leading sellers will gradually accumulate economies of scale and benefit from the Matthew effect, with a core focus on the entire industry chain capabilities from production to sales, validated and reusable underlying SOP capabilities, superior brand awareness, and technological attributes. Hence, the market structure of the cross-border e-commerce industry as a whole shows a large enough industry with intense competition, opportunities for continued breakthroughs in segmented markets and categories, but leading companies can accumulate the Matthew effect and leverage underlying capabilities, potentially leading to economies of scale and brand impact during ongoing operational iterations. Short-term attention should be paid to changes in the global trade situation, but currently, the globalized destination of cross-border e-commerce is expected to continue receiving policy support to mitigate risks.