The retail sector exhibited strength and volatility on July 16. According to data from Tonghuashun, the sector closed up 1.33% overall. Within the sector, 57 out of 71 individual stocks advanced, accounting for 80.28% of the total. Among the gainers, Xinhua Department Store Co.,Ltd and Xiangjiang Holding Group Co.,Ltd both secured their second consecutive daily limit-up, while Telling Telecommunication Holding Co.,Ltd hit the 10% limit. Boshi Glasses Co.,Ltd and Dalian Friendship (Group) Co.,Ltd also rose significantly by 11.52% and 7.01%, respectively.
Key Drivers of the Sector's Strength
Liu Youhua, Director of Research at Paipaiwang Wealth, commented on the sector's performance, stating, "The current strength in the retail sector is primarily driven by multiple factors. Firstly, the consumer market in the first half of 2026 showed stable growth with structural optimization. The latest data released by the National Bureau of Statistics on July 15 shows that total retail sales of consumer goods reached 24.8722 trillion yuan in the first half of 2026, a year-on-year increase of 1.3%. Excluding the impact of automobiles, retail sales grew by 2.8%, indicating strong resilience in daily consumer demand. Secondly, there have been frequent favorable policy developments recently. On July 9, nine departments including the Ministry of Commerce issued the 'Opinions on Accelerating the Innovative Development of the Retail Industry,' explicitly aiming to form a modern retail system by 2030 that is rationally laid out, offers high-quality supply, features diverse formats, is smart and convenient, and operates in an orderly competitive environment. The plan includes creating influential retail scenarios, launching innovative integrated business models, and cultivating retail enterprises with international competitiveness. On July 13, the State Council approved the '15th Five-Year Plan for Expanding Consumption,' which proposes that by 2030, the overall scale of the consumer market will continue to expand, the household consumption rate will increase significantly, the consumption of goods and services in society will grow rapidly, and total retail sales of consumer goods will reach approximately 60 trillion yuan, with consumption playing a stronger role in driving economic growth. With strong policy support, the retail industry is poised to embrace new development opportunities."
Broad-Based Recovery and Policy Impact
Citic Securities noted that the ongoing recovery in retail sector sentiment is steadily releasing demand for consumer goods manufacturing. Offline supermarkets and department stores are accelerating restocking, while inventory destocking for home appliances, home furnishings (core categories), and fast-moving consumer goods is speeding up, leading to continuous improvement in manufacturing capacity utilization. Commercial logistics are also benefiting, with improvements in urban-rural distribution systems and faster circulation of small commodities and daily necessities driving incremental business in trunk line logistics, intra-city delivery, and warehousing turnover, steadily boosting revenue across the logistics industry chain. Commercial property operations are reaping the benefits of recovery, as the rebound in offline consumption is driving up occupancy rates and customer traffic in commercial districts, shopping malls, and street-front shops, with supporting service revenues continuing to improve.
Supported by these favorable policies, the performance of some listed retail companies improved in the first half of 2026. Tonghuashun data shows that among the 71 listed companies in the retail sector, 40 reported year-on-year growth in net profit attributable to shareholders of the parent company for the first quarter of 2026, accounting for 56.34%. As of July 16, 33 companies have disclosed performance forecasts for the first half of 2026, with 15 expecting positive results. Among them, eight companies—Telling Telecommunication Holding Co.,Ltd, Guangzhou Department Store Co.,Ltd, *ST Nanzhi, Zhuhai Duty Free Group Co.,Ltd, ST Yuncheng, Nanning Department Store Co.,Ltd, Red Star Macalline Group Corp Ltd, and Yonghui Superstores Co.,Ltd—are projected to turn a profit in the first half of 2026 after losses.
Analyst Perspectives and Investment Themes
Jia Xiaolong, Director of the Black Knight Capital Research Institute, shared his view, stating, "The retail sector is undergoing a structural recovery. Firstly, substantive policy support continues to intensify. The 'trade-in' 2.0 subsidy program has been raised to approximately 300 billion yuan, extending from home appliances and automobiles to mobile phones, smart home devices, and green building materials. This is not a short-term stimulus but a systematic upgrade of consumption infrastructure. Secondly, leading retail enterprises are seeing continuous improvement in cash flow. Regional leaders are steadily enhancing operational efficiency by leveraging deep cultivation strategies and benefits from mixed-ownership reforms. Multiple economic indicators showed stable growth in Q1 2026, significantly elevating the importance of domestic demand for economic growth. It is advisable to focus on leading companies showing significant improvement in their interim reports."
Kaiyuan Securities suggested that, against the backdrop of the main theme of consumption recovery, investors should focus on leading companies that align with the 'emotional consumption' trend and show marginal improvement in brand power and competitiveness. The firm recommends focusing on four main investment themes. First, gold and jewelry: focus on brand enterprises with strong product capabilities and consumer insight in the high-end and fashion segments. Second, retail e-commerce: focus on leading cross-border e-commerce companies benefiting from retail adjustments, AI empowerment, and inventory improvements. Third, social services: focus on service consumption companies benefiting from travel recovery, experiential consumption upgrades, and AI-driven efficiency gains. Finally, medical aesthetics and cosmetics: focus on companies in the medical aesthetics and cosmetics sector that possess scientific research innovation capabilities and are deeply engaged in emotional consumption and high-end consumption segments.
Comments