Sinolink Securities: Silver Economy Enters Opportunity Period with Policy Support Driving Diversified Industry Development

Sinolink Securities released a research report highlighting China's significant demographic aging trend, with the population aged 60 and above reaching 310 million, accounting for 22% of the total. Over the next 5-10 years, the second baby boom generation will enter old age, creating a vast potential market for the silver economy. Policy support, deeper online channel penetration, and supply-side innovation are jointly driving high-quality development in this sector, with diversified demand from the elderly population fostering growth in segments like smart elderly care and senior mobility vehicles. Overall, the silver economy presents broad prospects amid aging trends and policy incentives, leading to diversified industrial development.

Key insights from Sinolink Securities include:

1. **Demographic Shift & Policy Support**: - The elderly population continues to rise, with the second baby boom cohort (born 1962–1975, averaging over 25 million annual births) set to age in the next decade. - Post-60s and 70s generations, benefiting from China’s reform-era prosperity, exhibit stronger spending power and health, boosting consumption willingness.

2. **Financial & Care Support**: - Long-term care insurance (covering 145 million people across 49 pilot cities by March 2022) and elderly subsidies alleviate care burdens. - Disability-related economic costs totaled ¥1.35 trillion (1.1% of 2023 GDP), prompting national-level care service subsidies in July 2025.

3. **Supply-Side Innovation & Policy Drive**: - Recent policies, including the "Three Trillion/Ten Billion" plan for senior products (November 2025), aim to standardize and smarten elderly care solutions.

4. **Digital Adoption & Market Growth**: - Elderly internet users surged from 36 million (2017) to 160 million (2024), with 82% mobile shopping penetration. Monthly active users on Taobao and Pinduoduo exceed 150 million. - China’s silver economy hit ¥7.1 trillion in 2023, growing at a 13.2% CAGR since 2019.

**Diversified Demand & Investment Opportunities**: - **Smart Elderly Care**: Robotics and IoT devices (e.g., wearables, smart toilets) enhance independence; penetration lags behind mature markets like Japan and the U.S. - **Senior Mobility**: Safe, user-friendly leisure tricycles address short-distance travel needs. - **Pet Products**: Over half of empty-nest seniors seek companionship, driving demand for pet-related goods. - **Convenience Stores & Pre-Made Meals**: Align with elderly consumption habits and simplify cooking. - **Health Supplements & Adult Incontinence Products**: Aging and suboptimal health awareness fuel growth. - **Integrated Medical-Care Solutions**: Combine healthcare and elderly resources for cost-effective care.

**Stock Picks**: - Smart Elderly Care: Chongqing Department Store, Xiaomi Corp. - Pet Food: Zhongpet Co., Ltd., Guabi Pet. - Health Supplements: Lingrui Pharmaceutical.

**Risks**: Lower-than-expected elderly spending power, digital channel barriers, and uneven supply due to lax regulation.