Analysis of Profitability in Service Consumption and CPI Recovery Industries and Support for Stable Return Portfolios

Based on the collected data and tool results, I will provide more robust and evidence-based analysis conclusions. The following content structurally evaluates the profit improvement of industries related to service consumption and CPI recovery, and discusses their supporting role in ‘stable return’ portfolios.

1. Core Conclusions (Strictly Based on Current Data)

• Currently confirmed clues: The direction of CPI recovery, the short-to-medium-term stock price elasticity of some discretionary/service consumption leaders, and the policy environment provide a window of ‘phased opportunities’ for the three main lines; however, there are obvious divergences and uncertainties in ‘sustainability of profit improvement’ and ‘valuation matching’, which are not yet sufficient to form full and sustained support for ‘stable returns’.
• Under verifiable evidence, a more pragmatic path is:

1. First, use defensive allocation to segmented leaders with ‘verified profit/cash flow + low/reasonable valuation’, such as aviation (with cost and channel advantages), essential consumption, and some high-quality service segments;
2. For tracks with high prosperity but obvious valuation premiums or no trending upward profit, maintain phased entry, strict volatility control, and exposure management;
3. Strengthen macro hedging and position management, using hedging, cash/cash-like assets, or cross-asset hedging to control portfolio volatility.

2. Evidence and Uncertainties of the Three Main Lines

1. Domestic Service Consumption

• Evidence support:
  • Service consumption leaders showed strong stock price elasticity in 2025. For example, China Duty Free Group (601888.SS) gained +31.48% in the past 3 months, +52.34% in 6 months, and +42.66% YTD—its stock price has already priced in the ‘recovery trade’ expectation [7][0].
  • Macro environment: The 2026 policy prioritizes the ‘special action to boost consumption and residents’ income increase plan’, which is expected to support the recovery of service consumption from the income and scenario sides [4].
  • International comparison: The global aviation industry is expected to record a record profit of approximately $41 billion in 2026, providing a weak reference for domestic aviation profit improvement [9].
• Uncertainties and risks:
  • Macro prosperity: The service PMI dropped from 52.6 in October to 52.1 in November—still in the expansion range but showing a slowing trend; the strength of prosperity expansion needs verification [6].
  • External demand and scenarios: The growth rate of Chinese tourists visiting Japan slowed sharply to +3% in November, compared to a cumulative 40.7% in the first 10 months—indicating phased fluctuations in the external environment and travel willingness [9].
  • Valuation and profit rhythm: China Duty Free Group’s TTM P/E is about 56.17x, with an absolute high valuation; its 2024 revenue decreased by -16% and net profit by -36%, while 2025 Q3 revenue dropped by -7.34% and net profit by -22%—no clear profit inflection point has been seen [2][7]. Current stock prices already include strong recovery expectations; if profit repair is weaker than expected, the mismatch between valuation and profit will amplify volatility.

2. Industries Related to CPI Recovery

• Evidence support:
  • CPI recorded a year-on-year +0.7% in November, the highest level since March 2024—indicating that the price environment has entered a温和回升 channel [4].
  • Essential goods like agricultural products/food and basic consumption are highly sensitive to CPI recovery, with potential for price increases and gross margin repair. If mild inflation forms from 2025 H2 to 2026, mid-stream processing and leading brands are expected to benefit from both gross margin and turnover.
• Uncertainties and risks:
  • Structural divergence: Essential consumption benefits more obviously; while discretionary consumption like high-end liquor is still in the de-stocking/demand repair stage. For example, Kweichow Moutai (600519.SS) fell by -7.21% in 2025 and Wuliangye (000858.SZ) by -21.59%—reflecting dual pressures from demand and valuation [0].
  • PPI remains in deflationary range: November PPI was -2.2% year-on-year; demand-side support is still unstable, so cost improvement for mid-stream industries may be limited [4].
  • Valuation screening difficulty: There are many CPI-related segments; it is necessary to bottom-up select leaders with ‘pricing power + channel repurchase + stable cash flow’ to avoid chasing themes.

3. Anti-Involution Related Assets

• Limited verifiable evidence and high uncertainty:
  • No systematic, implementable official framework for the ‘anti-involution’ industry or theme has been formed at the policy level; the relevant definition and benefit scope are vague.
  • From existing web search results, some companies (e.g., an AI service platform) have proposed efficiency improvement paradigms like ‘silicon-based employees’ and ‘RaaS’, but most are B-side efficiency improvement logics—there is still great uncertainty in the transmission of their performance to the capital market [5].
• More pragmatic alternative ideas:
  • Focus on segmented leaders with ‘efficiency improvement and cost advantages’, such as digital supply chains, automation equipment, and platforms/services with cost reduction and efficiency improvement capabilities;
  • Strictly examine performance/operation data verification (capacity utilization, human efficiency, gross margin improvement, etc.) to avoid pure concept trading.

3. Portfolio Design from ‘Stable Return’ Perspective

• Evidence constraints on risk-return characteristics:
  • China Duty Free Group’s 2025 return was +37.70% with a volatility of 2.29%—the Sharpe ratio was about 15.15 (simple calculation based on annual return and daily volatility), showing prominent short-term risk-return ratio [0]; however, considering its high valuation and unverified profit, it should not be over-allocated as a ‘ballast’ asset.
  • High-end liquor weakened overall in 2025 (Moutai -7.21%, Wuliangye -21.59%)—reflecting the fragility of ‘high valuation + weak recovery’, so it should not be heavily held before demand repair is falsified [0].
• More stable portfolio strategy (based on verifiable information):

1. Defensive ballast: Segmented leaders with reasonable/low valuation and stable cash flow (e.g., some essential consumption, utilities, high-dividend stocks) to control drawdowns and volatility;
2. Recovery core positions: Phased, small-step allocation to leaders with ‘good profit and valuation matching’ in service consumption and CPI-related tracks, with strict buy/sell discipline and stop-loss lines;
3. Hedging/multi-strategy: Moderately use stock index futures or related derivatives to hedge tail risks; control portfolio volatility through industry/style rotation and position management to pursue more sustainable risk-adjusted returns.

4. Key Verification Points and Tracking List

• Macro: Whether service PMI can strengthen again, the convergence rhythm of CPI-PPI scissors gap, the timing and magnitude of residents’ income and employment improvement [6][4].
• Industry and company: Passenger flow, average ticket price, profit margin, and balance sheet repair progress of aviation/tourism/duty-free leaders; verification of price increases and sales recovery for essential consumption leaders; whether there is a clear performance evidence chain in anti-involution-related segments.
• Valuation and sentiment: Valuation premium and profit repair matching degree of service consumption leaders—if profit improvement lags behind valuation repair, timely reduce positions or hedge.
• Policy implementation and capital flow: Specific measures and rhythm of the special action to boost consumption and residents’ income increase plan; flow direction and structural preferences of incremental capital in the capital market [4].

5. Phased Judgments and Operational Recommendations

• Evidence level: The three main lines have conditions for ‘phased opportunities’ in policy and valuation logic, but have not yet formed a stable portfolio foundation of ‘profit verification + valuation matching + macro resonance’.
• Operational strategy:
  • Prioritize allocation to segmented leaders with ‘verified profit/cash flow and reasonable/low valuation’ (aviation leaders, some essential consumption and high-quality service targets), controlling single industry/stock weight and concentration;
  • For high-valuation targets with strong recovery expectations (e.g., some service consumption leaders), before profit trends are verified by quarterly data, enter phasedly and set clear stop-loss and take-profit rhythms;
  • Strict position management and risk budget: Combine hedging tools and multi-asset hedging, with dynamic adjustments targeting volatility/drawdown;
  • Intensively track the above ‘key verification points’—only make directional加仓 after macro and industry signals are clear; otherwise, focus on structural adjustment and rhythm control.

6. Summary

• It is a ‘phased opportunity’ rather than a ‘certain main uptrend’: Under the combination of mild CPI recovery, strong stock price elasticity of service consumption leaders, and 2026 domestic demand priority policy, the three main lines have ‘structural opportunities’; however, they have not yet met the three conditions of ‘profit verification + valuation matching + macro resonance’ to support a stable portfolio for long-term returns.
• Recommended pragmatic path: Take ‘profit verification + valuation safety margin’ as the core; bottom-up select segmented leaders in the three main lines; combine position management, hedging, and dynamic rebalancing to pursue stable risk-adjusted returns while controlling volatility.