Summary of Key Points from the Investor Presentation on China Consumer Trends Industry Overview - **Industry Focus**: China Consumer Sector - **Presentation Date**: November 14, 2025 - **Research Firm**: Morgan Stanley Core Insights and Arguments - **Consumption Trends**: The presentation discusses current trends in consumer spending in China, highlighting a shift towards "New Consumption" categories, which include innovative and experiential products [9][12][24]. - **Market Performance**: Key "New Consumption" stocks have shown significant growth, with some companies experiencing share price increases of up to 174% year-to-date [43][44]. - **Retail Sales Growth**: Overall retail sales in October 2025 reported a year-over-year growth of 2.9%, with specific categories like Gold & Jewelry seeing a remarkable increase of 37.6% [76][78]. - **Consumer Sentiment**: There is a noted decline in consumer confidence, with expectations for household financial situations decreasing over recent months [64]. Financial Metrics - **Market Capitalization**: The market cap of key "New Consumption" stocks has been highlighted, with significant figures reported for various sectors [10][11]. - **Earnings Growth**: The average earnings growth for consumer stocks is projected at 6% for 2025, with a compound annual growth rate (CAGR) of 4% from 2024 to 2026 [27][80]. - **Price-to-Earnings (P/E) Ratios**: Current P/E ratios for consumer stocks are compared against historical averages, indicating a discount to the 15-year average for several segments [48][50]. Important but Overlooked Content - **Sector Divergence**: There is a notable divergence in performance within consumer segments, with some categories outperforming others significantly [45][46]. - **Macro Drivers**: The presentation touches on macroeconomic factors influencing consumer behavior, including GDP growth and inflation rates, which are critical for understanding the broader economic context [54][55]. - **Consumer Credit Trends**: The report indicates trends in consumer credit, which may impact spending patterns and overall economic health [59][60]. Conclusion - The presentation provides a comprehensive overview of the current state of the China consumer market, emphasizing the growth of "New Consumption" sectors, the performance of key stocks, and the macroeconomic factors at play. Investors are advised to consider these insights when making investment decisions in the consumer sector.

Summary of Key Points from the Investor Presentation on China Consumer Trends Industry Overview - The presentation focuses on the **China Consumer** sector, particularly the **"New Consumption"** stocks and their performance trends in the Asia Pacific region [1][2]. Core Insights and Arguments - **Market Capitalization Trends**: Key "New Consumption" stocks have shown significant market capitalization growth, with notable companies including Pop Mart, Bloks, Mixue, and others [6][7]. - **Consumer Industry Performance**: The overall consumer industry has experienced fluctuations, with a notable annual price movement of key indices and sectors, indicating a mixed performance across different consumer segments [10][11]. - **Price Movement Analysis**: The price movement of overall Chinese consumer stocks has been compared against major indices, revealing a decline in certain periods, particularly in 2022 and 2023 [10][11]. - **Earnings Growth Estimates**: The projected earnings growth for consumer stocks is estimated at **6%** for 2025, with a historical average of **15.1%** from 2010-2014 [75]. - **Retail Sales Trends**: Retail sales in July 2025 showed a year-over-year growth of **4.3%**, with specific categories like **Gold & Jewelry** and **Home Furnishing** performing particularly well [69][70]. Important but Overlooked Content - **Consumer Sentiment and Economic Indicators**: The presentation highlights the importance of consumer sentiment, with metrics such as household savings rates and youth unemployment rates impacting consumption trends [60][64][66]. - **Sector Valuation**: Current P/E valuations for various consumer segments are compared against their historical ranges, indicating potential investment opportunities in undervalued sectors [46][49]. - **Divergence in Performance**: There is a notable divergence in share price performance within consumer segments, with some categories like **IP Products** and **Gold & Jewelry** outperforming others significantly [42][44]. Conclusion - The China consumer sector is experiencing a dynamic shift, with "New Consumption" stocks leading the way in growth. However, macroeconomic factors and consumer sentiment will play crucial roles in shaping future trends and investment opportunities in this sector.

Summary of Key Points from the Investor Presentation on China Consumer Trends Industry Overview - The presentation focuses on the **China Consumer** sector, particularly the **"New Consumption"** trend, which includes companies like **Pop Mart**, **Bloks**, **Mixue**, **Guming**, **Giant Biogene**, **Weilong**, **Maogeping**, and **Laopu Gold** [6][19][39]. Core Insights and Arguments - **Market Capitalization Trends**: The market capitalization of key "New Consumption" stocks has shown significant growth, with some companies experiencing year-to-date share price increases of up to **239%** [38][39]. - **Consumer Industry Performance**: The overall consumer industry has seen varied performance, with certain segments like **IP Products** and **Gold & Jewelry** outperforming others, while traditional sectors like **Restaurants** and **Large Appliances** lag behind [35][40]. - **Price Movement Analysis**: The price movement of Chinese consumer stocks has been volatile, with major indices reflecting a decline of **-12%** to **-16%** in recent years, while some consumer segments have shown resilience [9][10][11]. - **Earnings Growth Estimates**: The projected earnings growth for the consumer sector is estimated at **6%** for 2025, with a compound annual growth rate (CAGR) of **4%** from 2024 to 2026 [25][72]. Important but Overlooked Content - **Consumer Sentiment and Spending**: Consumer confidence remains a critical factor, with a notable **youth unemployment rate** of **15%** impacting spending behavior. The household savings rate has also increased, reflecting a cautious approach to spending [57][60][63]. - **Retail Sales Trends**: Retail sales in July 2025 showed a year-over-year growth of **4.3%**, with specific categories like **Home Furnishing** and **Gold & Jewelry** performing particularly well [67][68]. - **P/E Valuation Insights**: The current price-to-earnings (P/E) ratios for various consumer segments indicate a discount to historical averages, suggesting potential undervaluation in certain areas of the consumer market [43][44]. Conclusion - The **China Consumer** sector is undergoing significant transformation, driven by the rise of "New Consumption" companies. While there are challenges such as economic volatility and consumer sentiment, the growth potential remains strong, particularly in innovative and emerging segments. Investors should closely monitor these trends for potential opportunities and risks in the market [4][49][72].

Investment Rating - Industry View: In-Line [6] Core Insights - In June 2025, there were inflows to 30 major HK-listed consumer stocks covered in the Shanghai/Shenzhen-Hong Kong Stock Connect, with average Southbound holdings as a percentage of free float increasing by 0.4 percentage points month-over-month for the 66 major HK-listed consumer stocks eligible for Connect trading [6][10] - Year-to-date 2025, average net flows from Southbound were up 2.9% compared to the end of 2024, with 40 stocks showing inflows and 26 showing outflows [2][3][6] - The top five stocks with inflows in June were Xiaocaiyuan (7.5 percentage points increase), Maogeping (5.8 percentage points), Topsports (5.6 percentage points), CR Beverage (4.5 percentage points), and Chervon (4 percentage points) [9][10] - The top five stocks with outflows included Wisdom Education (-3.2 percentage points), UPC (-2.8 percentage points), XBXB (-2 percentage points), Weilong (-1.8 percentage points), and JS Global (-1.6 percentage points) [9][10] Summary by Category - In June 2025, categories such as HPC, Agriculture, Home Appliances, Toys, Education, Luggage, and Duty-free recorded average outflows, while other categories experienced average inflows [9] - Year-to-date 2025, Beer, HPC, Education, Home Appliances, and Luggage recorded outflows, while other categories had average inflows [9]