From HSBC Jintrust Fund. Fei Xinhan, Fund Manager of HSBC Jintrust Consumption Dividend Fund. The 7-day National Day holiday consumption data has drawn considerable attention, and the numbers reveal a mix of volume recovery alongside moderating per-capita spending, reflecting a "higher volume, lower price" trend that has persisted for some time.

The question of how the 7-day National Day holiday consumption data performed is a natural starting point. According to estimates from the Data Center of the Ministry of Culture and Tourism, during the 7-day National Day holiday, domestic trips nationwide reached 826 million person-trips, with total domestic tourism spending of 738.375 billion yuan, representing year-on-year growth of 6.3% and 4.3% respectively on a comparable basis (daily average) versus 2025. Volume has recovered, while per-capita spending declined slightly year-on-year, maintaining the earlier trend of rising volume and falling prices. Residents showed a strong willingness to travel during the holiday, and consumption rationalization continued. On the supply side, efforts also continued, with rich and diverse product offerings and consumption subsidies distributed in many regions to sustain consumer momentum. Inbound and outbound tourism markets were both more active than the broader market. Taking inbound data as an example, the country received 2.983 million inbound tourist visits, up 19.0% and 6.5% year-on-year on a comparable basis (daily average) versus 2024 and 2025 respectively. For outbound data, based on sample statistics, the daily average cross-border passenger volume on civil aviation also exceeded the daily average domestic passenger volume.

Regarding what changes and characteristics emerged in this year's National Day consumption, several points stand out. In terms of resident travel modes during this year's National Day long holiday, railway passenger flow significantly outperformed civil aviation and highways. It is expected that oil price increases caused by geopolitical conflicts may have influenced residents' travel mode choices to some extent. From a regional structure perspective, outbound travel was moderate while inbound travel was hot, with notable supply-side support. The continued visa-free expansion and departure tax refund facilitation over the past two years have created incremental inbound growth, generating new growth points for domestic goods consumption and services consumption.

On the question of why National Day holiday consumption data shows services outperforming goods, which is also a notable trend this year, and what reasons underlie this and what opportunities in the services sector deserve attention, the explanation involves multiple factors. From the National Bureau of Statistics data for the first half of this year, China's services consumption demand growth rate is notably faster than goods consumption demand growth. This reflects both an objective stage-of-development pattern (based on overseas experience, as per-capita GDP rises, the weight of experience and health-related services consumption typically increases) and incremental gains from proactive policy efforts to shore up weak links (quality services supply was relatively insufficient in the past and is now being continuously strengthened and completed with policy support). Compared with mature economies, China's services consumption as a share of household consumption expenditure still has considerable room for improvement. In developed economies, the share of services consumption expenditure commonly ranges around 50% to 65%, with some countries even higher. China has not yet reached the 50% level, indicating significant room for growth in both space and total volume. Around services consumption, key areas of focus include investment opportunities in travel and tourism, dining services, healthcare, elderly care and childcare, among other aspects, along with actively identifying individual stocks that can genuinely deliver on earnings.

Given that data from the first eight months shows a generally moderate consumption recovery, with demand growth slower than the pace of supply recovery, the question of how to capture structural opportunities in an environment of limited demand growth is important. Domestic demand consumption has continued to bottom out this year. The core focus is on sub-sectors where the supply-demand relationship is improving or the inventory cycle is improving, while also actively identifying sub-industries with阶段性 growth dividends. From a stock perspective, in this downcycle of overall domestic demand growth, leading consumer enterprises have continuously reinforced their operational resilience and barriers, such as brand barriers, supply chain barriers, and channel barriers, providing a solid foundation for sustained and stable performance.

As third-quarter earnings reports are about to be released successively, from a fundamental perspective, the key consumer sub-industries whose performance and future opportunities deserve close attention include the following. In the upcoming earnings season, the core focus will be on the overall consumer sector, especially the financial reports of leading enterprises, strengthening analysis and tracking of aggregate figures. In terms of specific tracks, on the domestic demand side, the focus is on finding sub-sectors and individual stocks whose operating cycles have already been solidified at the foundation or are entering an upward cycle. On the external demand side, the focus is on quality enterprises that are developing their own brands and have globalized, multi-regional, diversified layouts, seeking individual stocks with阶段性 growth. At the current stage of consumer stock investment, both top-down identification of sub-industries and bottom-up selection of enterprises with medium-to-long-term earnings resilience are considered very important.

On how to capture consumer sector investment opportunities in the fourth quarter and which sub-industries and specific tracks to focus on, the approach involves the following. On the domestic demand side, the core effort is to find sub-industries where demand is stabilizing, the supply side is seeing marginal improvement, or the inventory cycle is improving, and to identify sub-sectors with阶段性 growth potential. On the external demand side, the focus is on directions where enterprises have a global vision and the relative competitive advantages of Chinese companies in the global industrial chain are continuously strengthening. On the basis that the sector overall offers a margin of safety, the focus is on screening quality targets whose industry supply-demand landscape is in an improving cycle or whose own operating inflection point is turning upward for positioning. The operational recovery of consumer enterprises is often not a short-term pulse but has strong continuity and sustainability. Meanwhile, a growing number of enterprises with excellent earnings quality are giving shareholders increasingly higher shareholder return ratios, which also provides a certain margin of safety for consumer stock investment.

In the context of the rapid development of the AI industry, the consumer sectors likely to benefit are worth examining. Against the backdrop of the major AI industry trend, the consumer industry and enterprises will benefit in multiple ways, such as the creation of new products and services and assistance in achieving efficiency improvements. On June 18, the Ministry of Commerce and seven other departments jointly issued the "Implementation Opinions on Accelerating the Development of 'Artificial Intelligence Plus Consumption,'" proposing 17 measures across five aspects, including increasing new supply of AI products, promoting deep integration of AI with services such as home life, elderly care, cultural tourism, accommodation and dining, and education and teaching, and promoting the application and popularization of AI in key areas such as wholesale and retail, e-commerce, and logistics distribution. AI is also an effective helper for enterprise efficiency improvement, helping enterprises achieve cost reduction and efficiency enhancement across the entire chain around multiple core links including research and development, marketing, and management. On the R&D side, AI can assist product design and formula development, accelerating the new product launch cycle. On the marketing side, with AI assistance, more precise targeting and feedback analysis can be achieved. MACD golden cross signals have formed, and these stocks are performing well.