The May Day holiday is coming! Are consumer stocks worth watching?

2024 has been designated as the "Consumption Promotion Year" by the Ministry of Commerce, highlighting the government's emphasis on the consumer market.

Data from the National Bureau of Statistics also shows that in the first quarter of this year, total retail sales of consumer goods increased by 4.7% year-on-year, with final consumption contributing 73.7% to GDP growth, playing a crucial supporting role in economic growth.

As the May Day holiday approaches, consumer activity is expected to further surge, with some consumer stocks already experiencing "preemptive" gains.

New Policies to Boost Consumption, Local Governments Step Up Efforts

Recently, a spokesperson for the Ministry of Commerce stated at a press conference that as the May Day holiday nears, the Ministry is earnestly implementing the central government's policies on consumption promotion, coordinating efforts under the "Consumption Promotion Year" initiative to create a favorable atmosphere for the holiday, meet public demand, and drive sustained consumption growth.

First, Focus on Trade-In Programs to Boost Major Consumption. The Ministry of Commerce has prioritized promoting trade-in programs for consumer goods, combining policy and event-driven approaches. It is guiding local governments to leverage brand activities, key exhibitions, industrial clusters, and leading enterprises to launch the "National Consumer Goods Trade-In Action - Local Stations" series.

The trade-in initiative primarily targets major consumer goods such as automobiles, home appliances, and furniture.

Second, Highlight Integration and Innovation to Expand New Consumption. On April 27, the Ministry of Commerce will launch the "2024 International Consumption Season" in Shanghai, featuring debut showcases, fashion consumption, health consumption, and sports consumption. Local governments are encouraged to organize diverse promotional activities to integrate commerce, tourism, culture, sports, and health.

Third, Monitor Market Operations to Ensure Holiday Supply. During the May Day holiday, the Ministry will closely monitor market trends, urging businesses to increase inventory and replenishment frequency to ensure supply.

Notably, beyond the Ministry's support, local tourism departments are actively preparing for the holiday. For example, Fujian Province has launched the "Fujian Tourism Consumption Season" campaign, offering free tickets and hotel discounts. Data shows a 25.57% increase in pre-booked travelers and a 14.44% rise in spending compared to 2023.

Hainan Province will introduce discounts like "Air Tickets as Attraction Tickets" and "10,000 Stores Offering Discounts," alongside over 150 cultural and tourism events. Xinjiang will host 290+ activities, including food festivals and beer festivals.

What Do Institutions Think About Consumer Stocks?

On the other hand, some consumer-related stocks have already seen significant gains. For instance, travel-related stocks like $TRIP.COM-S(09961.HK)  and $TONGCHENGTRAVEL(00780.HK)  have risen sharply in 2024. The "Big Three White Goods" companies—$Midea Group(000333.SZ) , $Haier Smart Home(600690.SH) , and $GREE(000651.SZ) —along with $HISENSE HA(00921.HK) , have also performed well.

While the May Day holiday may stimulate these stocks, their gains are largely driven by strong sector performance and investor interest.

Ahead of the holiday, several institutions have shared their views on the consumer market. Caixin Securities noted that trade-in policies will boost home appliance and renovation demand, recommending leading brands with strong channels. Guotai Junan Securities highlighted subsidies for new energy vehicles, anticipating demand growth. Huachuang Securities expects policy-driven momentum for automakers like BYD and Changan Auto. AVIC Securities predicts a tourism rebound, benefiting local hospitality and catering firms.

Author: Yan Shisi