CGS has released a research report stating that the consumer sector is currently demonstrating strong defensive characteristics in the market, with improved dividend levels providing support through dividend yields. The firm is monitoring the strength of consumption-boosting policies in the second half of the year. The worst period for the property market may be over, which is beneficial for stabilizing household financial expectations and improving consumption. Moutai's consecutive price increases on its iMoutai platform hold symbolic significance. The defensive and allocation value of the consumer sector is now prominent, and it is advisable to focus on high-quality leaders within the industry. The main points from CGS are as follows:
Defensive and Allocation Value of Consumer Sector Stands Out
1) Since 2021, the market performance of the SW Consumer Style Index has faced pressure, declining by 8.05%, 14.63%, and 13.24% in 2021, 2022, and 2023 respectively. It stabilized with changes of -1.14% and +2.72% in 2024 and 2025, primarily due to the implementation of consumption-boosting policies, notably the trade-in policy. Since the beginning of 2026, the market style has favored technology, coupled with weak fundamentals in the consumer sector, leading to a 16.81% decline in the SW Consumer Index.
2) The consumer sector currently exhibits strong defensive attributes in the market. From early July to July 17th, the CSI 300, ChiNext Index, and STAR 50 Index fell by 9.04%, 21.05%, and 22.30% respectively, while the SW Consumer Style Index rose by 1.09% this month, showing significant relative outperformance.
3) After a prolonged adjustment period, positioning in the consumer sector is low, and holdings have been significantly cleared out. As of Q1 2026, the combined market value of the consumer sectors (SW Textile & Apparel, Household Appliances, Agriculture, Light Industry, Commerce & Trade, Social Services, Food & Beverage) in active fund top holdings accounted for 8.50%, a notable decrease from the peak of 23.46% in Q4 2022.
4) Current dividend levels in the consumer sector have improved, with dividend yields providing support. As of July 17, 2026, the trailing twelve-month dividend yields for SW Food & Beverage and SW Household Appliances reached 4.34% and 3.95% respectively. Due to industry characteristics, the absolute dividend yields for other SW consumer sectors are relatively low but are also at high percentile levels in recent years.
Monitoring the Strength of Second-Half Consumption-Boosting Policies
1) The government began stimulating consumption starting in July 2024, with numerous policies implemented since then. Since the beginning of 2026, the intensity of consumption stimulus policies has been weaker than in 2025, leading to a reduction in consumption subsidies, a development to which the market has fully reacted.
2) From January to June 2026, retail sales of consumer goods were relatively weak, with a year-on-year increase of 1.3%. Against this backdrop, the State Council issued an approval for the "15th Five-Year Plan for Expanding Consumption" on July 13th. This plan largely continues the previous framework, making systematic arrangements across six aspects and 28 key tasks and measures. The goal by 2030 is to continuously expand the overall scale of the consumer market, significantly increase the household consumption rate, achieve relatively rapid growth in goods and services consumption across society, and reach total retail sales of consumer goods of approximately 60 trillion yuan (representing a CAGR of 3.7% from 2025 to 2030).
Stabilization and Improvement in First-Tier Secondary Home Prices as a Leading Consumption Signal
1) In recent years, the prolonged decline in housing prices has led to a reduction in household wealth and insufficient purchasing power. The secondary housing market began to recover in Q1 2026, with transaction volumes picking up in Q2 2026. According to China Index Academy data, a "small spring" market appeared in some core cities in March, with Shanghai and Beijing seeing secondary home transaction volumes increase by 6% and 3% year-on-year respectively despite a high base. In April, May, and June 2026, transactions of existing residential properties in 20 cities increased by 13.4%, 19.3%, and 12.6% year-on-year respectively, with Shanghai up by 24%, 31%, and 23% respectively. Beijing and Shenzhen also showed continuous improvement.
2) Secondary home prices in first-tier cities were the first to rebound from the bottom. According to National Bureau of Statistics data, since March 2026, the sales price index for existing residential properties in first-tier cities among the 70 large and medium-sized cities ended its month-on-month decline and turned to sustained increases, rising by 0.4%, 0.4%, 0.4%, and 0.3% month-on-month from March to June respectively. This indicates that the worst period for the property market may be over, which is conducive to stabilizing household financial expectations and improving consumption.
Moutai's Multiple Price Hikes This Year Signal a Bottom in Premium Liquor Consumption
In recent years, wholesale prices for premium baijiu have continued to fall, with Moutai's pricing being one of the barometers for the consumer market. Since 2026, Moutai has consecutively raised retail prices on its iMoutai platform, which holds symbolic significance. The retail prices on the iMoutai platform are lower than those on public e-commerce platforms, making it a tool for the company to rapidly increase sales volume and capture consumer demand. Since the sales volume on the iMoutai platform increased in 2026, public platforms have still maintained a relative premium, indicating that there is not excessive Moutai inventory in the channels. Since March, the iMoutai platform has implemented consecutive price increases, raising the retail price for Guizhou Moutai (2026) on March 31st, and increasing retail prices for non-standard products like the 15-Year Aged, Fine, Zodiac Commemorative Edition, and kilogram bottles on May 16th. Effective from 00:00 on July 18th, the retail price for Feitian 53%vol 500ml Guizhou Moutai (2026) on the iMoutai platform was raised from 1539 yuan per bottle to 1639 yuan per bottle, and the sales contract price was raised from 1269 yuan per bottle to 1369 yuan per bottle, an increase of 100 yuan per bottle. The consecutive price hikes suggest that Moutai is currently facing limited sales pressure.
Risk Warnings: Risks include policies failing to meet implementation expectations; insufficient consumer demand; and intensifying market competition.
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