Core Viewpoint - The Hong Kong new consumption sector has experienced a significant decline in stock prices, with major companies like Pop Mart and others seeing substantial market value evaporation despite reporting strong earnings growth [1][5]. Group 1: Market Performance - The new consumption sector in Hong Kong has faced a collective downturn, with Pop Mart's stock price dropping nearly 11% on October 23, closing at 232.4 HKD per share, resulting in a market capitalization of 312.1 billion HKD [1][3]. - Major stocks in the sector, including Pop Mart, Lao Pu Gold, and Mi Xue Group, have seen declines exceeding 20% from their yearly highs, with a total market value loss of over 280 billion HKD [1][3][5]. - Pop Mart's stock has fallen over 32% from its historical high of 339.8 HKD on August 26, while Lao Pu Gold and Mi Xue Group have also experienced significant declines of over 34% and 31%, respectively [3][4]. Group 2: Fund Flows and Market Sentiment - Despite continued inflows from southbound funds, local and international intermediary funds have shown signs of withdrawal, indicating a shift in market sentiment [2][6]. - Concerns about growth sustainability, a reassessment of business models, and profit-taking pressures are identified as key factors driving the current market adjustment [2][8]. - There is a notable divergence among institutional investors regarding the future trajectory of the sector, with some viewing the downturn as a temporary correction while others see it as a potential end to the growth narrative [2][10]. Group 3: Company-Specific Insights - Pop Mart reported a remarkable year-on-year revenue growth of 245%-250% for Q3, yet this did not bolster market confidence, leading to continued stock price declines [5][8]. - Concerns about the sustainability of growth are prevalent, with analysts suggesting that Pop Mart's revenue growth may peak this year, leading to potential slowdowns in the future [8][9]. - Lao Pu Gold faces scrutiny over its business model, with increasing reliance on outsourced production and a disconnect between its luxury positioning and actual product pricing [9][10]. Group 4: Future Outlook - The new consumption sector is currently in a phase of "light assets, high turnover, and strong cash flow," but there are signs of deteriorating supply-demand dynamics, particularly due to intensified competition [10][11]. - Some analysts remain optimistic about the long-term prospects of the consumption sector, citing macroeconomic support and evolving consumer trends towards personalized and emotional consumption [11].