Cathay Pacific Haitong: June Social Zero Data Consumption Stabilizes, Must Choose, and Service Consumption Sentiment Dominates

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the year-on-year growth rate changed from negative to positive in June, and major categories such as automobiles, home appliances, and petroleum products became the core drag, and the consumption of essential goods and services prevailed. According to the report of the General News Agency's zero data, the bank is optimistic about two main investment lines: the first is the stable and definitive service consumption circuit. Under the long-term trend of consumer consumption being skewed towards experiential and service, the growth rate of service retail sales led by a large margin in product retail growth in the first half of the year. Demand in segments such as cultural tourism, entertainment, hotels and restaurants, tax exemptions, online and local lifestyle, communication and information services continued to be released, and growth characteristics were outstanding; the second is a stable and essential consumer circuit that is resistant to cycles. Demand is rigid and fluctuates less, and can be achieved in an environment where overall consumption is weak Steady growth through the cycle.

Cathay Pacific Haitong's main views are as follows:

Total retail sales of social consumer goods in June were 4269.1 billion yuan, +1% year-on-year, and -0.6% in May. Consumption recovered 0.4% month-on-month, and total social zero picked up slightly

In terms of category segmentation, the categories that performed well were in the low-value, high-frequency, and electronic-upgrade products. Among them, food products had a year-on-year ratio of +7.9%, beverages +5.8%, tobacco and alcohol +12.1%, cosmetics +12.6%, and communication equipment +16.5%. On the one hand, 618 e-commerce promotion combined with mid-year promotion volume in offline stores, driving centralized replacement of upgraded products such as cosmetics and communication equipment, centralized release of domestic demand for beauty products, and full release of online channel traffic dividends; on the other hand, summer high temperatures drive beverage consumption just needs to be picked up. Food, food, and food relied on residents' daily rigid expenses to remain stable, and demand for Dragon Boat Festival gifts led to stronger consumption in tobacco and alcohol categories.

After divesting the three disruptors of automobiles, household appliances, and petroleum products, residents' endogenous demand for immediate demand, upgrades, and service consumption maintained steady growth of more than 30%, and consumption fundamentals were resilient. In the first half of 2026, total social zero was weak (+1.3% year-on-year), mainly dragged down by the three major categories of automobiles, home appliances, and petroleum products. The three were suppressed by declining subsidy policies, weakening real estate chains, and high oil price bases, respectively. If only the automobile category is excluded, the total amount of social zero in the first half of 2026 was 22.9 trillion yuan, an increase of 2.8% over the previous year; if all three categories of automobiles, home appliances, and petroleum products were excluded, the endogenous consumption growth rate of products was in the range of 3.2%-3.5%, indicating that endogenous consumption recovery was clearly excessive, and the distortion of total data was due to structural drag down.

The consumption structure continues to lean towards services, and the growth rate of service retail sales has been higher than retail sales for a long time, which is the main deterministic line

In the first half of 2026, retail sales of services increased by 5.3%, retail sales of goods increased by 1.1%, and consumption of services clearly dominated. Among retail sales of services, retail sales of communication and information services, travel consulting and rental services, and cultural, sports and leisure services grew rapidly. The bank believes that, driven by the rules of consumption upgrading, the basic physical needs of domestic residents have been fully satisfied. The focus of consumption has shifted from purchasing durable goods to spiritual experience and efficient services, and residents are more willing to pay for time and emotional value. At the same time, service consumption has certain anti-cyclical attributes. Commodity consumption is highly tied to the real estate and automobile policy cycle, declining subsidies and weakening new homes continue to suppress large physical goods such as home appliances and automobiles. Cultural tourism, catering, and communication services are small high-frequency expenses. After reducing the budget for large purchases, residents will not cut leisure and travel expenses. Demand is more endogenous and resilient. The future continues to be optimistic about cultural tourism and performing arts, hotels, restaurants, tax exemptions, online local living, communication and information services, etc.

Risk warning: Policy implementation falls short of expectations; residents' income growth is slowing down; industry competition intensifies.