Cathay Pacific Haitong: June Society improved service consumption on a zero-month-on-month basis and was more resilient

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the total amount of social zero increased +1.0% year-on-year in June (0.6% in May), and the growth rate was +1.6 pct month-on-month. From January to June, retail sales of services increased by 5.3% year on year, higher than the growth rate of retail sales of goods by 4.2 percentage points, and service consumption was relatively more resilient. In the medium to long term, service consumption, new consumption, cross-border exports, and technological empowerment are still the main lines of growth. Short-term suggestions to focus on: 1) Cross-border e-commerce, education, and jewelry were booming in the second quarter, and there were catalytic expectations. 2) Defensive targets with low PB and high dividends. 3) The stock prices of leading companies have been adjusted a lot, and short-term suppressing factors have been fully responded to. 4) Technology-enabled enterprises.

Cathay Pacific Haitong's main views are as follows:

In June 2026, the zero social growth rate rebounded month-on-month, and the zero decline in social networks above the limit narrowed

The National Bureau of Statistics released social zero data for June 2026: the total volume of social zero in June increased +1.0% year on year (0.6% in May), growth rate +1.6 pct month on month; excluding automobiles, +3.0% year on year (+1.1% in May), growth rate +1.9 pct month on month; retail sales of consumer goods per unit above the limit fell 2.0% year on year (May -4.9%), and the decline narrowed by 2.9 pcts month-on-month.

The growth rate of catering services improved month-on-month. Cosmetics, tobacco and alcohol performed well, and the decline in household appliances and furniture narrowed

① Basic VS optional: grain, oil, and food (YoY +7.9% /month-on-month growth +6.0pct), tobacco and alcohol (YoY +12.1% /month-on-month growth +7.3pct); gold and silver jewelry (YoY -3.4% /decrease 5.5 pct month-on-month), cosmetics (YoY +12.6% /month-on-month growth +10.1pct); Home appliances (-8.7% YoY /6.9pct YoY), furniture (-6.6% YoY) 2.1pct). ② Product vs. service: In June, retail sales of products +0.9% /+1.6pct, retail sales of products above the limit -2.2% /+3.0pct; food revenue +1.2% /+0.6pct, catering revenue above the limit +0.1% /+1.8pct. From January to June, retail sales of services increased by 5.3% year on year, higher than the growth rate of retail sales of goods by 4.2 percentage points, and service consumption was relatively more resilient.

The cumulative growth rate of online retail sales declined slightly from month to month, and e-commerce penetration rate increased slightly

According to the retail sector, from January to June, retail sales of convenience stores and supermarkets among retail units above the limit increased by 6.6% and 3.8%, respectively; retail sales of specialty stores, department stores, and brand specialty stores decreased by 1.5%, 2.1%, and 8.7%, respectively. Online vs. offline: ① The cumulative growth rate of online retail sales declined slightly from month to month: from January to June, retail sales of online goods and services nationwide were 10071.5 billion yuan, up 5.2% year on year; among them, retail sales of online goods were 6429.6 billion yuan, up 4.8% year on year, down 0.2 pct from January to May; among online retail sales, food, clothing, and consumer goods increased 16.8%, 6.2%, and 1.3% respectively. ② E-commerce penetration rate increased slightly: According to cumulative estimates, retail sales of online products accounted for about 25.9% of total retail sales of social consumer goods from January to June, up about 0.3 pct from 25.6% in January-May.

Risk warning: Consumption recovery falls short of expectations, risk of macroeconomic fluctuations.