Guosheng Securities: March social retail sales increased more than expected year-on-year, focusing on new formats and new drivers of change.

Guosheng Securities released a research report stating that since 2025, the overall retail fundamentals of social services have maintained stable recovery, with some sub-industries showing marginal improvement, combined with policy stimulus, which is worth looking forward to. Based on the sector situation, the bank focuses on: 1) oversold stocks affected by previous tariffs. 2) Q1 stable or improving, current valuation still has room for growth; 3) theme adjustments; 4) new formats and innovations; 5) pro-cyclical leading companies, such as manpower, catering chains, hotels, duty-free shops; 6) tourism integration, growth or stable growth dividend subjects. Key points of Guosheng Securities are as follows: In March, social retail sales increased by 5.9% year-on-year, exceeding previous expectations. According to data from the National Bureau of Statistics and Wind, the total retail sales of social consumer goods in March 2025 amounted to 4.094 trillion yuan, a year-on-year increase of 5.9%, with a month-on-month growth rate of 1.9%; excluding automobiles, the retail sales of consumer goods totaled 3.661 trillion yuan, a year-on-year increase of 6.0%, and excluding factors such as oil and automobiles, the retail sales of consumer goods reached 3.4537 trillion yuan, a year-on-year increase of 5.1%. In terms of prices, the consumer price index (CPI) for March decreased by 0.1% year-on-year. Overall, from January to March 2025, the total retail sales of social consumer goods reached 12.4671 trillion yuan, a year-on-year increase of 4.6%, with the retail sales of consumer goods excluding automobiles reaching 11.3434 trillion yuan, a year-on-year increase of 5.1%, exceeding previous expectations. By category, essential categories all achieved growth, with furniture/appliances experiencing accelerated growth. Among them: 1) Essential categories: all maintained positive growth. In March, the year-on-year growth rates for grains/oils, beverages, tobacco/alcohol, and daily necessities were +13.8%, +4.4%, +8.5%, and +8.8% respectively, with month-on-month growth rates of +2.3%, +7.0%, +3.0%, and +3.1%. 2) Optional categories: only petroleum products and construction materials declined year-on-year. Furniture/appliances saw accelerated growth, while cosmetics/petroleum products experienced a deceleration in growth rates. In March, communication equipment, sports goods, cultural/office supplies, furniture/appliances, jewelry, cosmetics, textiles/clothing, and traditional/Western medicine all achieved year-on-year and month-on-month growth rates, with year-on-year growth rates of +28.6%, +26.2%, +21.5%, +29.5%, +35.1%, +10.6%, +1.1%, +3.6%, +1.4%, and month-on-month growth rates of +2.4%, +1.2%, -0.3%, +17.8%, +24.2%, +5.2%, -3.3%, +0.3%, -1.1%, with furniture/appliances experiencing accelerated growth; petroleum products/construction materials declined by -1.9%/-0.1% year-on-year and by -2.8%/-0.2% month-on-month. Rural growth is slightly slower than urban growth, with steady growth in catering revenue. 1) By region, in March, urban retail sales reached 3.5595 trillion yuan, a year-on-year increase of 6.0%; rural retail sales reached 534.5 billion yuan, a year-on-year increase of 5.3%, with rural growth slightly slower than urban growth. 2) By type, goods retail sales in March totaled 3.6705 trillion yuan, a year-on-year increase of 5.9%, while catering revenue reached 423.5 billion yuan, a year-on-year increase of 5.6%. 3) By channel, physical goods online retail sales in January-March 2025 reached 2.9948 trillion yuan, a year-on-year increase of 5.7%, accounting for 24.0% of total social retail sales; among physical goods online retail sales, food/clothing/utilities goods increased by +14.0%/-0.1%/+5.6% year-on-year. 4) By retail format, in January-March 2025, the retail sales of convenience stores/supermarkets/department stores/specialty stores/brand stores among retail units above quota increased by 9.9%/4.6%/1.2%/6.7%/1.4% respectively year-on-year. Risk warning: Overall weak consumer demand; intensified industry competition, with price increases falling short of expectations; macroeconomic performance falling below expectations.