CITIC Securities: The consumer finance industry is in a period of dual-driven growth fueled by policy benefits and technological advancements

On March 31, a China Galaxy Securities research report said that the securities sector is seeing triple-margin tailwinds, and that strong upside in 2026 earnings remains promising. The allocation value of the insurance sector is becoming apparent, and investors are advised to focus on investment opportunities in individual stocks with high dividend yields, low valuations, and relatively lower sensitivity to earnings. In the Hong Kong non-bank financials sector, long-term and medium-term allocation value stands out under the convergence of low valuation characteristics and improving profit expectations. For the diversified financials sector, with regulatory logic stabilizing, the consumer-spurring orientation becoming clear, and the backdrop of AI technology improving efficiency, the consumer finance industry is in a dual-driven period led by both policy dividends and technology dividends.

The China Galaxy Securities research report said that this year’s Spring Candy Fair (ChunTian) is taking place during a period of deep adjustment in the liquor-and-spirits industry, and during this round of adjustment the liquor-and-spirits industry is undergoing a profound industrial reshaping as it shifts from B-end to C-end, and from channels to consumers. Therefore, this year’s Spring Candy Fair shows a “coexistence of cold and hot” phenomenon. China Galaxy Securities believes that this stage is not only about clearing inventory and earnings; the measures and strategic directions taken by liquor companies now will affect the industry landscape 3–5 years later. It is important to focus on four key dimensions of initiatives: pricing-tier layout, category innovation & new-channel layout, product-line layout, and adjustments to nationwide strategy.

The China Galaxy Securities research report said that since this year, increases in coal-fired power and electricity capacity tariffs, as well as the inclusion of the new-energy mechanism spread settlement, have led to broadly higher system operation fees. After sorting through the data, it follows that in 2026, system operation fees in each province will average increase by 3 cents/kWh compared with 2025, mainly due to higher charges for the new-energy mechanism and coal-fired power capacity. By region, the increases are significant only in a few provinces, while system operation fee increases are not obvious in the West. Going forward, as new-energy mechanism spread settlement fees continue to grow, system operation fees are expected to rise moderately. After the issuance of Document No. 114, the participation level of state-owned and central-government enterprises in energy storage investment has risen significantly. With large orders under centralized procurement releasing in large quantities, in the first 1–3 months newly added bid capacity grew by nearly 120%. China Galaxy Securities believes that system operation fees are not the main contradiction in current energy storage investment and will have a relatively small impact.