CITIC SEC: Improvement in demand, continued cost reduction, and easing competition are expected to lead to the recovery and showing of resilience in the performance of the terminal catering industry.

CITIC SEC released a research report stating that the central government's clear focus on domestic demand will directly benefit the catering industry as a representative of the economic cycle, with a strong potential for recovery. Leading players in the catering sector have already raised prices in response to the overall stabilization of competition, reducing the likelihood of intensified price wars. The catering supply chain sector is expected to benefit from the recovery of downstream catering performance, with the bank optimistic about profit recovery driven by improved demand in 2025, continued cost reductions, and eased competition. The main points of CITIC SEC are as follows: - Clear direction of domestic demand policy, catering industry expected to benefit and recover. - Competition in the terminal catering sector is showing signs of stabilizing. - Under policy stimulus, terminal catering is expected to demonstrate elasticity. - The catering supply chain is expected to benefit from the recovery of the downstream sector. - Investment strategy: Focus on companies in the catering industry with strong performance and potential for recovery. Select companies with high potential for recovery and fast expansion to recommend. Risk factors: Economic growth lower than expected, unexpected trend in consumption downgrade; increasing industry competition risks; slower than expected company expansion; food safety issues.