Cathay Pacific Haitong Securities: Service consumption boom boosts technology and hardware prices continue to rise

The Zhitong Finance App learned that Cathay Pacific Haitong Securities released a research report saying that the service consumption boom has improved, and the price of technology and hardware continues to rise. Sentiment performance was divided last week (11.24-11.30), which is worth paying attention to: 1) There was an increase in domestic demand, and the boom in snow and ice travel and movie markets increased significantly, or reflecting a contraction in real estate and durable goods consumption, the recovery trend of “eat, drink and play” related service and mass goods consumption continued to show. 2) The emerging technology industry continues to be booming, but under the influence of the short-term AI bubble narrative, the sustainability of the TMT hardware boom growth depends on positive progress in AI applications. Next, we will focus on the progress of commercialization of AI applications. 3) Demand for construction engineering is weak, domestic demand for resources is mostly weak and volatile. Expectations of overseas interest rate cuts are heating up again, and international metal prices have risen sharply; affected by increased iron ore production, dry shipping prices have continued to rise month-on-month.

Cathay Pacific Haitong's main views are as follows:

Downstream consumption: Service consumption has improved significantly, and durable real estate products are still under pressure. 1) Service consumption: The popularity of domestic snow and ice tourism has increased significantly. According to Tongcheng Travel, the average ticket price for Guangzhou-Harbin on New Year's Day increased by about 56% compared to November '25, mainly due to the drop in domestic temperatures, and residents' ice and snow consumption sentiment increased; the movie box office was +326.7%/+355.7% month-on-month, mainly due to the introduction of popular new movies, which led to an increase in demand for watching movies. 2) Real estate: Commercial housing transaction area in 30 large and medium-sized cities was -34.3%, of which commercial housing transaction area in first-tier, second-tier and third-tier cities had a year-on-year ratio of -31.6%/-33.9%/-40.7%, and second-hand housing transaction area in the top 10 key cities was -24.3%. Real estate sales continue to decline; 3) Durable goods: Consumption overdraft effects for durable goods continue to show, and manufacturers' production schedules have been drastically lowered. Average daily retail sales of passenger cars continued to decline year on year; domestic sales of air conditioners and export sales schedules were -29.9%/-11.4%, respectively, in December, respectively, focusing on the progress of incremental consumption policies.

Technology & Manufacturing: Prices for high-performance storage have risen sharply, and demand for construction engineering is weak. 1) TMT: Driven by AI infrastructure investment, the technology and hardware boom continues to be strong. The average spot price of high-performance DDR4/DDR5 DRAM memory was +13.3%/+8.2% month-on-month, continuing to rise rapidly. In November 2025, the number of domestic game versions was +58.9% year-on-year. The supply of games continued to be relaxed, which is conducive to the development of AI software applications. Furthermore, the release of AI phones equipped with bean bags marks a breakthrough in AI end-side applications. 2) Infrastructure real estate: Demand for construction work continues to bottom out, and steel prices have rebounded slightly, mainly due to the month-on-month decline in blast furnace operating rates, leading to marginal improvements in supply and demand, and glass and cement prices continue to bottom out. 3) Manufacturing: The operating rate of manufacturing industries such as automobile semi-steel tires and chemicals declined month-on-month, and companies' willingness to recruit declined marginally.

Upstream resources: coal prices fell month-on-month, and industrial metals prices rose. 1) Coal: Coal prices are -2.2% month-on-month. Although supply is still tight, it is difficult for the demand side to clearly exceed expectations in the short term. Coal prices are recovering part of the increase; 2) Colourful: Expectations of interest rate cuts are heating up, and industrial metals prices have risen.

Traffic logistics: Demand for long-distance travel has declined, and dry freight rates have risen sharply. 1) Passenger transportation: Demand for long-distance travel declined month-on-month, but was still strong year-on-year. Baidu's migration scale index was -3.8% month-on-month, +18.5% year-on-year, and the number of flights operated by international flights was +0.5% month-on-month, continuing to increase. 2) Freight transport: The freight logistics boom declined month-on-month. The national highway truck traffic/national railway freight volume was -0.2%/+0.7% month-on-month, and the national postal express pickup/delivery volume was -2.9%/-1.5% month-on-month, and continued to decline after “Double Eleven”. 3) Shipping: Transportation prices for dry scatter/refined oil products increased markedly from month to month, mainly due to increased iron ore/crude oil production, which boosted shipping demand.

Risk warning: domestic policy uncertainty, trade friction uncertainty, global geopolitical uncertainty.