Key trends in 2021: (1) Despite near-term headwind from COVID-19 resurgence, normalising consumer behaviour should lead to a strong rebound in out-of-home spend vs. the fading at-home consumption, while some behaviour (e-tailing) might linger for longer; (2) inflationary pressure manageable for leading players with strong brand equity and supply chain, given the more favourable competitive dynamics; (3) Chinese brands to further gain share (especially in sportswear and cosmetics); and (4) rotating to discretionary sectors that are attractively valued. Prefer discretionary to staples. We upgrade sportswear to our top pick among sectors, as we see secular trends such as increasing health consciousness among consumers and accelerated DTC channel shifts by brands post COVID. We remain positive on restaurants (accelerating store openings) and white goods (domestic air-con turnaround and improving competition dynamics). We are turning slightly less constructive on baijiu and beer post the strong rally since July 2020, yet fundamentals remain robust underpinned by on-premise recovery and accelerating premiumisation trend. Small appliances and supermarkets are our least preferred sub-sectors given fading food-at-home demand and intensified competition (Figure 29 for our sub-sector summary view). Stock calls. We prefer post-COVID recovery plays with secular growth and reasonable valuation and suggest investors accumulate on near-term pullback: Li-Ning (upgrading to Outperform) as we expect it to lead the sportswear recovery and direct-to consumers to drive margin upside. Haidilao (more store roll-outs), Gree (air-con turnaround), Mengniu (healthy organic growth with margin improvement), Moutai (channel mix/price hike to drive further growth), CRB (share gainer in premium segment) and Proya (riding premiumisation of domestic cosmetics). Least preferred names: Sun-Art, Supor and Yihai (COVID beneficiaries). We also upgrade Anta to Outperform and downgrade Yanghe to Neutral.