Highlights

• During the National Day holiday (1-7 October), service consumption remained resilient. Tourism and entertainment revenue increased 24% yoy, supported by the extended Mid-Autumn and National Day holidays, which boosted long-distance travel and cross-province trips. Catering revenue rose 9% yoy, while economy hotel chains and homestays also delivered solid growth. Macau tourism remained robust, with daily visitor arrivals increasing14% yoy and exceeding the official forecast by 9%.
   
• Household durables and audio-visual equipment consumption were the bright spots, with sales surging 40% yoy, driven by trade-in subsidies, new product launches and replacement demand. However, broader retail trends were lukewarm, with sales at key commercial districts rising only 5% yoy and Hainan duty-free per capita spending falling 10% yoy. 
   
• Our top picks are Anta, Atour, Midea and YUM China in consumer discretionary, and Mengniu in consumer staples. Maintain OVERWEIGHT.
   

Analysis

• Baijiu – channel checks suggested an over 10% yoy decline in sell-through. Liquor retailers in Chongqing and Chengdu reported that sell-through remained lacklustre during the Mid-Autumn and National Day holidays, with most stores recording yoy declines of more than 10% compared with the same period last year. By price segment, retailers indicated that unpackaged baijiu and products priced around Rmb100 were the best sellers, while demand for products in the Rmb400-500 price range was weak. Premium baijiu, particularly Moutai and Wuliangye, maintained relatively stable pricing, with limited promotional activity. 
   
• Meanwhile, online channels delivered steady growth, supported by holiday promotions and instant delivery services. JD Supermarket's liquor GMV grew 15% yoy during 20 August-25 September, with live-streaming sales up more than 29% yoy. 
   
• Catering – sales revenue rose 9% yoy. According to VAT invoice data from the State Taxation Administration, sales revenue from catering services expanded 9% yoy during the National Day holiday, with snack food and fast-food up 16% and 31% yoy, respectively.
   
• Hotel – demand for diversified accommodation picked up. According to VAT invoice data from the State Taxation Administration, sales revenue from economy hotel chains and homestay services increased 6% and 13% yoy, respectively, during the National Day holiday.
   
• Household durables – retail sales rose 41% yoy. According to VAT invoice data from the State Taxation Administration, retail sales of household durables and audio-visual equipment grew 40% yoy during the National Day holiday, supported by the release of trade-in subsidy funds ahead of the holiday, concentrated launches of new digital products and replacement demand. By category, retail sales of household durables, household audio-visual equipment (such as TVs), communication devices (such as smart phones and wristband), and kitchen and sanitary appliances jumped 41%, 37%, 120% and 52% yoy, respectively.
   
• Specialty retail – per capita spending fell 10% yoy. According to Haikou Customs, during the National Day holiday, total offline duty-free sales in Hainan were Rmb855m, up 4% yoy on a daily average basis, while the number of shoppers was 123,000, up 14% yoy on a daily average basis. This implies per capita spending of Rmb6,951, down 10% yoy.
   
• Macau – daily arrivals increased 14% yoy and exceeded the official forecast by 9%; floor checks indicated HK$1,000-2,000 baccarat tables dominated the mass market. According to provisional data from the Public Security Police Force, Macau welcomed approximately 1,143,000 visitors during the National Day holiday, averaging around 163,000 arrivals per day, up 14% yoy and 9% above the Macao Government Tourism Office's forecast of 150,000 daily arrivals. Combined with the Mid-Autumn holiday on 25-27 September, total visitor arrivals reached approximately 1,872,000 during 25 September-7 October, representing an average of around 144,000 arrivals per day.