Assessment and Analysis of Investment Opportunities in A-Shares Consumer and Investment Sectors Under the Expanding Domestic Demand Policy

According to the Central Financial and Economic Affairs Office, expanding domestic demand has been clearly designated as the top priority task for 2024, with domestic demand contributing 71% to economic growth in the first three quarters [1]. However, consumption and investment growth have slowed in recent months, indicating that policy effects need sustained efforts. Against the backdrop of exports contributing nearly one-third to economic growth and a record trade surplus [1], the importance of expanding domestic demand policies is even more prominent.

From the performance of representative consumer stocks, the consumer sector has demonstrated strong resistance to declines:

• Guizhou Moutai (600519.SS)
  : Down 5.20% in the past 3 months, P/E ratio 19.79x, ROE up to 36.48% [0]
• Wuliangye (000858.SZ)
  : Down 10.18% in the past 3 months, P/E ratio 15.43x, ROE 20.15% [0]
• Hikvision (002415.SZ)
  : Down 7.06% in the past 3 months, P/E ratio 19.94x, ROE 16.51% [0]

Compared with the investment sector, the consumer sector has significantly smaller declines, showing relative advantages under the support of expanding domestic demand policies.

The current valuation of the consumer sector is relatively reasonable:

• Liquor leaders have a P/E ratio in the range of 15-20x, which is at a historical median level
• Strong profitability, with ROE generally above 15%
• Sound financial condition, with a debt risk rating of “low risk” [0]

As direct beneficiaries of expanding domestic demand policies, the consumer sector mainly benefits from:

1. Consumption stimulus policies
   : Promoting optional consumption such as automobiles, home appliances, and liquor
2. Income growth expectations
   : Improving residents’ consumption capacity and willingness
3. Consumption upgrade trend
   : Sustained growth in demand for high-quality consumption

Traditional investment sectors represented by real estate face great challenges:

• Vanke (000002.SZ)
  : Plummeted 29.30% in the past 3 months, with negative P/E ratio and ROE of -31.07% [0]
• The real estate industry is affected by both policy regulation and market adjustment
• Debt pressure and sales decline restrict investment returns

Although traditional investment is under pressure, there are still opportunities in new infrastructure and manufacturing investment:

• Digital economy infrastructure construction
• New energy industry investment
• Investment related to technological innovation and industrial upgrading

1. Core consumer leaders
   : Focus on liquor and home appliance leaders with pricing power and brand advantages
2. Consumption upgrade theme
   : Focus on upgraded consumption areas such as medical health, education, culture and entertainment
3. Policy-beneficiary targets
   : Prioritize sectors directly benefiting from consumption stimulus policies

1. Avoid traditional real estate
   : Remain cautious during the industry adjustment period
2. Focus on new infrastructure
   : Prioritize emerging investment areas such as digital economy and new energy
3. Manufacturing upgrade
   : Focus on opportunities related to high-end manufacturing and smart manufacturing

1. Consumption recovery falls short of expectations
   : If household income growth is slow, it may affect the strength of consumption recovery
2. Policy effect lag
   : The effect of expanding domestic demand policies takes time to manifest
3. External environment impact
   : Global economic slowdown may negatively impact exports and investment

Comprehensive analysis shows that under the background of expanding domestic demand policies, the

. The consumer sector demonstrates stronger price resilience, reasonable valuation levels, and sound profitability. It is recommended that investors focus on high-quality targets under the consumption upgrade trend, while treating traditional investment sectors cautiously and seeking structural opportunities in emerging fields such as new infrastructure.

[1] Gilin API Data
[2] Yahoo Finance - “Former U.S. Senior Official: China’s Trade Surplus Is Too Large for the Global Economy to Accept” (https://hk.finance.yahoo.com/news/前美國高級官員-中國貿易順差太大-令全球經濟無法接受-105815151.html)