To The Moon

From December 27th to 28th, the National Fiscal Work Conference was held in Beijing. Minister of Finance Lan Fo'an stated that fiscal policy next year will vigorously stimulate consumption. This involves deeply implementing special actions to boost consumption, continuing to allocate funds to support the replacement of old consumer goods with new ones, and adjusting and optimizing subsidy scopes and standards. Currently, consumption has become a crucial engine for China's economic growth, with its pulling effect becoming increasingly prominent. In 2025, through a more proactive "combination punch" of fiscal policies, fiscal expenditure intensity will be maintained, with greater support for "dual key" projects and intensified efforts to expand the implementation of the "dual new" policies, aiming to stimulate consumption potential from both the supply and demand sides. Liu Feng, Chief Economist at the Central University of Finance and Economics' International Institute of Green Finance, noted that China's economy has transitioned from a traditional model driven by factors and investment to a high-quality development stage led by domestic demand and innovation. China possesses the world's largest middle-income group, a complete industrial system, and an continuously upgrading consumption structure, indicating massive potential in domestic demand. Data shows that in the first 11 months, China's total retail sales of consumer goods increased by 4% year-on-year, a growth rate faster than both the same period last year and the full year last year. As the primary lever for expanding domestic demand, boosting consumption has been a key focus of macroeconomic policy this year. On one hand, the scale of ultra-long-term special treasury bond funds allocated for implementing the "dual new" policies has increased significantly. 300 billion yuan is designated for supporting the replacement of old consumer goods, up by 150 billion yuan from the previous year; 200 billion yuan is for supporting equipment upgrades, an increase of 50 billion yuan. On the other hand, in March, the General Office of the Communist Party of China Central Committee and the General Office of the State Council issued the "Special Action Plan for Boosting Consumption," proposing to "utilize ultra-long-term special treasury bond funds to support local governments in intensifying and expanding efforts to implement consumer goods replacement, promoting the green and intelligent upgrade of bulk durable consumer goods such as automobiles, home appliances, and home furnishings." According to the latest data, in the first 11 months of this year, the nationwide campaign to replace old consumer goods drove related product sales to exceed 2.5 trillion yuan, benefiting over 360 million people. During the first 11 months, the retail sales of household appliances and audio-video equipment, cultural and office supplies, and communication equipment by units above the designated size increased by 14.8%, 18.2%, and 20.9% year-on-year, respectively. Liu Jiangyi, Vice Chairman of the China National Light Industry Council, stated at a press conference that from January to November this year, over 128 million home appliances were replaced, driving sales of related goods to exceed 2.5 trillion yuan. Standards such as smart grading for furniture are助推ing the industry's intelligent upgrade, with leading companies accelerating the launch of mid-to-high-end smart furniture products, creating a market scale of over 10 billion yuan and becoming a new growth point for furniture consumption upgrades. Furthermore, from the perspective of consumption scenarios, the consumption structure is continuously upgrading, exhibiting characteristics of both total volume expansion and structural upgrading. Simple commodity transactions can no longer fully meet consumers' current composite needs, with "immersive, leisure-oriented, and personalized" experiences increasingly becoming the new consumption trends. According to the latest "Global AI Consumer Spending Forecast (2024–2030)" report by Counterpoint Research, consumer spending in the generative AI field is rapidly reshaping the global technology industry landscape. Global generative AI consumer spending is projected to grow from $225 billion in 2023 to $699 billion in 2030, representing a compound annual growth rate (CAGR) of 21%. The report indicates that both consumer-facing AI software and the hardware required to run it will experience rapid growth in the coming years. From a segment perspective, AI conversation platforms are the fastest-growing sector, while personal assistant AI and content generation tools are also expected to see significant expansion. By 2030, the global monthly active users (MAUs) of AI conversation platforms are forecast to exceed 5 billion. Huatai Securities pointed out that as the special actions to boost consumption continue to deepen and high-quality supply increases, domestic consumption is expected to maintain a moderate recovery trend. Within the consumption sector, they recommend focusing on structural opportunities such as the rise of domestic brands, AI+ consumption, emotional consumption, and blue-chip leaders with low valuations and high dividends. Wanlian Securities, meanwhile, stated that China's consumption has entered a new stage of "consumption stratification," characterized by mass-market products pursuing cost-effectiveness, while consumers are willing to pay a premium for innovative products and services that provide emotional value. Against this backdrop, the trendy toys market is rapidly expanding, with industry concentration expected to increase; the gold and jewelry industry is shifting from channel-driven to product and design-driven; and domestic cosmetics brands continue to rise leveraging their R&D and marketing advantages. Related industries are facing development opportunities, and leading companies are expected to benefit. Related concept stocks include China Tourism Group Duty Free Corporation Limited (01880): A core business of CTG Duty Free is providing duty-free shopping services for inbound tourists, particularly at its downtown duty-free shops in major port cities like Shanghai, Beijing, and Guangzhou. If subsequent policies introduce more convenient visa and tax refund measures, or relax shopping eligibility for downtown duty-free shops, it could bring incremental customer traffic and sales. Xiaomi Corporation (01810): On December 17th, Xiaomi's "Human x Car x Home" Full Ecosystem Partners Conference was successfully held. Luo Fuli, head of the MiMo team, delivered her debut speech, releasing the MiMo-V2-Flash large language model. This model optimizes inference cost and speed and leverages the closed-loop of the Human x Car x Home ecosystem to accelerate the implementation of AI in the physical world, empowering multiple scenarios including phones, IoT, and cars. The MiMo model provides an entry point to the AI ecosystem, with the potential to establish a viable commercial closed-loop. Midea Group Co., Ltd. (00300): Citigroup released a research report stating that based on Midea Group's strong growth performance in the first three quarters of 2025, it expects Midea to achieve its full-year 2025 financial targets, namely a year-on-year sales increase of approximately 10%, and the goal of improving the net profit margin year-on-year is easily achievable. Simultaneously, Midea remains one of the bank's top picks in the Chinese consumer sector. BYD Company Limited (01211): In early November, Goldman Sachs released a research report predicting that BYD's average annual compound growth rate in profit from 2025 to 2028 would reach 30%, with the contribution of overseas profits rising from 21% in 2024 to 60% by 2028. It maintained a "Buy" rating with an H-share target price of HK$141 and an A-share target price of 144 yuan. Pop Mart International Group Limited (09992): In early November, Huachuang Securities released a research report maintaining a "Strong Recommend" rating for Pop Mart. Based on the Q3 2025 operating performance, it raised the company's profit forecast, estimating net profit attributable to parents for 2025-2027 to be 12.32 billion / 16.93 billion / 21.09 billion yuan, corresponding to a target price of HK$34.539. The company's overall revenue in Q3 2025 increased by 245-250% year-on-year, with revenue in China (including Hong Kong, Macao, and Taiwan) up 185-190% and overseas revenue surging 365-370%. The high growth performance confirms the long-term potential of global expansion and IP ecosystem synergy. The company's rich IP matrix and diversified product portfolio are expected to continuously meet the demand in the trendy toys market, and its full-industry-chain IP operation capabilities are viewed positively.