With the implementation of consumer stimulus policies, residents' consumption confidence has significantly increased.

Orient released a research report stating that the trend of consumer recovery is good, and the momentum of online retail continues to be released. The increment of the transaction volume in the e-commerce industry is strongly supported, maintaining a positive rating for the industry. The recommended stocks include Alibaba Group Holding Limited Sponsored ADRSW (09988, Buy); JD-SW (09618, Buy), which benefits the most from the advantages in the home appliances and 3C category as well as the national subsidy policy; PDD Holdings Inc. Sponsored ADR Class A (PDD.US, Buy), a top-tier shelf e-commerce platform with continuous improvement in platform ecology; KUAISHOU-W (01024, Buy), a leading content e-commerce platform; and Vipshop Holdings Ltd Sponsored ADR (VIPS.US, Not Rated), a vertical fashion e-commerce platform. The main points of Orient are as follows: March saw an acceleration in social retail sales, with a significant increase in consumer sentiment driven by policy stimulus. 1) Total view: Since February, the government has implemented multiple consumer stimulus policies, resulting in a continuous release of consumer potential starting in March. The total social retail sales in March increased by 5.9% month-on-month, exceeding the Wind's consensus expectation of 4.4%. 2) Regional view: Urban consumption growth surpasses rural areas. In March, urban retail sales increased by 6.0% year-on-year, while rural areas increased by 5.3%. Both the year-on-year and month-on-month improvements were better in urban areas than in rural areas, with the policy stimulus effect being more pronounced in urban areas. 3) Looking at different types, the acceleration in goods retail sales is more significant. The year-on-year growth in goods retail sales in March was 5.9%, with a 2.0 percentage point increase month-on-month, while catering revenue increased by 5.6%, with a 1.3 percentage point increase month-on-month. In addition, service retail sales in the first quarter increased by 5.0% year-on-year, maintaining steady growth. By category, most categories showed a significant acceleration. In essential consumption categories, there was differentiation, with high-frequency categories such as tobacco/alcohol, grains and oils, food, beverages, and daily necessities showing year-on-year growth rates of 8.5%, 13.8%, 4.4%, and 8.8% respectively, with month-on-month increases of 3.0, 2.3, 7.0, and 3.1 percentage points. In optional consumption categories, the release of policy dividends drove high growth in categories. High-frequency categories such as clothing/textiles, sports entertainment, and cosmetics showed year-on-year growth rates of 3.6%, 26.2%, and 1.1%, with month-on-month increases of 0.3, 1.2, and -3.3 percentage points, benefiting from the expansion of policy dividends. Communication equipment saw a year-on-year growth rate of 28.6%, continuing the high growth trend from February. The recovery of real estate policies promoted downstream growth in home appliances and furniture, with year-on-year growth rates reaching 35.1% and 29.5% respectively, with significant month-on-month increases. Jewelry and automobile categories saw year-on-year growth rates of 10.6% and 5.5%, respectively. Other categories such as petroleum products and building materials saw year-on-year growth rates of -1.9% and -0.1%. Online retail sales continued to improve in March, with high consumer sentiment. It is expected that the e-commerce industry will continue the good trend from March into Q2. 1) From an online perspective, physical goods online retail sales in March grew by 6.9% year-on-year, with a 1.9 percentage point increase from January to February. In terms of penetration rate, the online retail sales accounted for 24.0% of total social retail sales, with cumulative year-on-year growth rates of 14.0%, -0.1%, and 5.6% for food, clothing, and daily necessities, with month-on-month increases of 3.2, 0.5, and 0.2 percentage points. 2) Looking at the express delivery perspective, according to data from the Ministry of Transport, express delivery volume in March increased by 20.3% year-on-year, with express delivery income increasing by 10.4%. The average income per delivery and per package (physical goods online retail sales/express delivery volume) were 7.48 and 67.9 yuan, with year-on-year decreases of 8.2% and 4.5%, continuing a downward trend. In the first two weeks of April (3.31-4.13), express delivery volume was 34.4 and 38.1 billion, basically continuing the trend from March. According to data from Trip.com Group Ltd. Sponsored ADR, the overall trend of domestic tourism during the Qingming and May Day holidays is stable and improving, indicating high consumer sentiment, and it is expected that Q2 will continue to benefit from the good consumption recovery situation in March.