Sinolink Securities: "The 'First Issue Economy' is reshaping consumption. Xiong'an New Power Technology is expected to catalyze healthy growth in the consumer sector."

Haitong Securities released a research report stating that the first launch economy is a new quality productivity in consumption. The policy explicitly emphasizes the first launch economy to promote industrial upgrading, enhance urban commercial vitality, increase high-quality supply, and help unleash domestic consumption demand. Behind the first launch economy are brand power, innovation power, and supply chain support. On one hand, it can attract more first-store new products with both appearance and substance by building a platform for first launches of domestic and foreign brands, leading the international consumption trend. On the other hand, it accelerates the formation of brand aggregation effects, drives the upgrading of the upstream industrial chain, promotes enterprise innovation, and further enhances regional influence. With policy guidance, it is expected to catalyze the healthy growth of many industries and companies in the consumer sectors. Event: The third plenary session of the 20th Central Committee of the Communist Party of China approved the "Decision of the Central Committee of the Communist Party of China on Further Comprehensive Deepening Reform and Advancing Chinese-style Modernization", which emphasizes "perfecting and expanding the long-term consumption mechanism" and "actively promoting the first launch economy". The Central Economic Work Conference in December specifically stated that next year the focus will be on vigorously implementing the "two new" policies, innovating diversified consumption scenarios, expanding service consumption, promoting the development of cultural tourism, and actively developing the first launch economy, ice and snow economy, and silver-haired economy. Vice Minister of Commerce, Sheng Qiuping, stated in a public speech over the weekend that the Ministry of Commerce will accelerate the issuance of policy documents to promote the first launch economy and guide local governments to develop the first launch economy according to local conditions. Haitong Securities' main points are as follows: Characteristics of the first launch economy 1) Emphasizes the first time, including first release, first show performance, first exhibition, first store opening, etc.; 2) Emphasizes the entire process of chain development. The first launch economy not only focuses on the first activities but also includes a complete system of new product research and development, release, display, promotion, and sales; 3) Emphasizes leadership and trendiness. The first launch economy has the characteristics of fashion, quality, and trendiness, which is an economic form that meets the trend of consumption upgrading and the requirements of high-quality development. Compared to the first store economy, the first launch economy emphasizes the entire process of chain development. This chain development not only brings new product release activities, brand displays, and other short-term effects to the city but more importantly, it forms an industrial ecosystem around new products, new formats, new models, as well as the gathering of first stores and headquarters, gradually building a complete system network of new product research and development, release, display, promotion, and sales. Relying on brand power, innovation power, and supply chain support, the first launch economy has become an important engine for the upgrade of urban business districts. From 2019 to 2021, the number of first stores in the country increased by over 95% compared to before. 1) In terms of brand formats: from early stage focusing on product brands to expanding to service consumption such as catering, accommodation, culture, and entertainment. The proportion of consumer goods brands is gradually decreasing, matching the increasing proportion of service consumption. 2) In terms of urban distribution: first stores tend to favor first-tier and strong second-tier cities. Among them, Shanghai and Beijing have the highest concentration of first stores, mainly featuring global and national first stores. In 2023, Shanghai introduced 1,215 first stores with a year-on-year increase of +13.2%, including 11 first stores at the Asian level and above, and a total of high-energy-level first stores accounted for 13.7%, maintaining its leading position in terms of scale and quality nationwide. From January to April 2024, Shanghai added 489 new first stores, including 3 new global or Asian first stores, 55 national and mainland first stores, with high-energy-level first stores accounting for 11.9%, reaching new highs in scale and quality. In the first half of 2024, Beijing added 485 new first stores, including both the first store of a brand and flagship stores and innovative concept stores. Behind the first launch economy are brand power, innovation power, and supply chain support. On the one hand, it can attract more first-store new products with both appearance and substance by building a platform for the first launch of domestic and foreign brands, leading the international consumption trend. On the other hand, it accelerates the formation of brand aggregation effects, drives the upgrading of the upstream industrial chain, promotes enterprise innovation, and further enhances regional influence. Investment advice: The first launch economy is a new quality productivity in consumption, and the policy explicitly emphasizes the first launch economy to promote industrial upgrading, enhance urban commercial vitality, increase high-quality supply, and help unleash domestic consumption demand. With policy guidance, it is expected to catalyze the healthy growth of many industries and companies in the consumer sectors. Recommendations include: 1) First show performances and exhibitions: Funshine Culture Group, Songcheng Performance Development, Zhejiang Meorient Commerce & Exhibition Inc., Shanghai Fengyuzhu Culture Technology; 2) First launch marketing: BlueFocus Intelligent Communications Group, Foshan Yowant Technology, Guangdong Guangzhou Daily Media, Guangdong Advertising Group; 3) First launch games/films and other entertainment content: Fuchun Technology, Giant Network Group, Bona Film Group, Shanghai Film, Beijing Enlight Media; 4) First launch IP/Guzi economy: COL Group Co., Ltd., Shanghai Yaoji Technology. Risk warning: Policy implementation falls short of expectations, residents' consumption willingness falls short of expectations, first launch content/production.The quality/format did not meet expectations."Bonjour, comment a va?" "Hello, how are you?"