CICC: The social service industry will see some stabilization and bottoming out by 2025, and we are looking forward to the recovery of domestic demand and policy expansion next year, which will bring about inflection points in both quantity and price.

Zhongjin released a research report stating that after experiencing 24 years of general price pressure and same-store decline, the social service industry is showing signs of stabilization and bottoming out (slowing price wars, same-store stability turning positive or narrowing declines) in 2025. Looking ahead to 2026, the bank suggests waiting for the recovery of domestic demand and policy expansion to bring about turning points in volume and price, and prioritizing leading comprehensive companies with strong internal growth momentum and high-growth segment leaders. It also recommends paying attention to industries and companies with strong cyclical attributes, potential turning points, and significant flexibility. Zhongjin's main points are as follows: Service chains are timely, seeking winners through differentiation across the cycle With the increasing proportion of service consumption and the gradual improvement of infrastructure supporting chain business formats, the future looks promising for the emergence and growth of more high-quality brands. Factors such as competition from takeaway platforms, new social security regulations, and the topic of prefabricated meals can optimize the supply competition landscape in the medium to long term and benefit top-quality enterprises. The catering and hotel industries are relatively easy tracks to nurture large companies. In the face of challenges posed by differentiation among brands and the cycle of trends, enterprises that are likely to emerge victorious and cross the cycle often meet the following criteria: 1) hitting the right balance between consumer value and emotional appeal; 2) possessing comprehensive strengths in product, operation, brand, and organizational iteration; 3) able to capture continuous growth DRIVE (such as innovative product and store models, expansion in all directions, internationalization, new business formats, etc.). Waiting for the expansion of policies in the catering, tourism, and hotel industries to bring about demand recovery and turning points in volume and price, continue to favor leading comprehensive companies with strong internal growth momentum and high-growth segment leaders In the 26 years in the beverage industry, attention should be paid to high base numbers and disruptions in the competitive landscape. However, top-quality brands are still favored to achieve relatively stable performance growth and gradually replace single and lower-tier chain brands in the medium to long term. The resilience of fast-food categories is highlighted, while the differentiation of fine dining brands continues. Attention should be focused on high-growth companies with differentiation; the balance between supply and demand in the hotel industry still needs time to rebalance. The bank expects supply growth rates to slow under the backdrop of continuous RevPAR decline for two years, but still show positive growth. The turning point for RevPAR turning positive may await the recovery of business demand. Leading high-quality companies are favored to expand market share even during industry downturns. The personnel and service industry has strong cyclical attributes, with a long-term trend of increasing penetration of flexible employment; duty-free sales are bottoming out, with attention on potential changes such as the role of Hainan's closing-off policy and expanding local distribution channels; tourism sector's performance growth stability is slightly weaker due to price pressures and cost inputs, with attention on the progress of various scenic area projects and potential catalysts such as transportation improvements. Risk factors: Policies and their effects weaker than expected; intensified competition; companies unable to improve management capabilities.