Group 1 - The Hong Kong stock consumer sector has shown remarkable growth this year, led by new consumption forces such as trendy toys, IP economy, and beauty products, reflecting a shift in consumer behavior among the younger generation who prioritize emotional value in their purchases [1] - As of June 16, 2023, stocks like Pop Mart, Mixue Ice City, and Lao Pu Gold have seen significant price increases, with Pop Mart rising 205%, Lao Pu Gold increasing 296%, and Mixue Ice City up nearly 90% year-to-date [1] - The "self-pleasure economy" driven by 260 million Chinese Gen Z consumers (born between 1995-2009) is reshaping consumption patterns, with over 40% of young consumers making purchasing decisions based on emotional value [1] Group 2 - The Hang Seng Consumer Index (HSCGSI.HK) and the Hong Kong Stock Connect Consumer Index are the two main indices for investing in the Hong Kong consumer sector, with the latter including the CSI Hong Kong Stock Connect Consumer Theme Index and the Guozheng Hong Kong Stock Connect Consumer Theme Index [2] - As of June 16, 2023, the three major indices have shown year-to-date performance, with the Guozheng Hong Kong Stock Connect Consumer Index up 23.87%, the CSI Hong Kong Stock Connect Consumer Theme Index up 21.32%, and the Hang Seng Consumer Index up 10.62% [3] - The Hang Seng Consumer Index focuses on essential consumer sectors, showing a lower risk of 31.12% compared to the other two indices, which have risks of 37.54% and 32.82% respectively [3] Group 3 - Three ETFs closely track the Hang Seng Consumer Index, with year-to-date returns of 10.54%, 9.39%, and 9.99% respectively, and a total net inflow of 12.27 billion, 7.31 billion, and 0.09 billion [5] - The CSI Hong Kong Stock Connect Consumer Theme Index includes major internet technology companies, with top holdings like Alibaba and Tencent, making it suitable for investors looking for a blend of consumption stability and technology growth [5] - Four ETFs track the CSI Hong Kong Stock Connect Consumer Theme Index, with year-to-date returns ranging from 18.53% to 20.08% and total net inflows between 1.58 billion and 4.37 billion [7] Group 4 - The Guozheng Hong Kong Stock Connect Consumer Theme Index, which includes diverse new consumption sectors such as jewelry, beauty, trendy toys, and dining, has shown a strong performance with a year-to-date increase of 23.87% [7] - The newly established ETFs tracking the Guozheng Hong Kong Stock Connect Consumer Theme Index are aimed at investors looking to capitalize on the consumption trends driven by Gen Z [9] - For conservative investors, the Hang Seng Consumer Index and its ETFs are recommended for their defensive characteristics, while those seeking a balanced exposure to technology and consumption may consider the CSI Hong Kong Stock Connect Consumer Index ETFs [10]

Core Insights - LABUBU, a core IP under Pop Mart, has become a phenomenon in the collectible toy market, with significant demand leading to sold-out events globally, particularly in South Korea and the UK [1][10][12] - The surge in popularity has raised safety concerns, prompting Pop Mart to temporarily halt sales of LABUBU products in both South Korea and the UK due to potential safety risks at crowded sales events [10][12] - The brand's strategy of creating limited edition products has led to a speculative market, with some experts warning that this could result in a financial bubble [17][21] Sales and Market Performance - Pop Mart's LABUBU series has seen explosive sales, with reports of long queues and even altercations among customers in various locations [1][11][19] - The company's overseas revenue increased dramatically from 1.066 billion RMB to 5.07 billion RMB, a growth of 375.2% from 2023 to 2024 [25] - LABUBU's popularity has also positively impacted related industries, such as 3D printing, with a notable increase in stock prices for companies involved in this sector [29][32] Brand Value and IP Strategy - Pop Mart's brand value rose significantly, reaching 10.344 billion RMB in 2025, up from 5.091 billion RMB in 2024, reflecting a 103.2% increase [22][23] - The company operates a unique IP model, treating each product line as an individual brand, akin to managing artists in a talent agency [24][26] - Pop Mart's approach to IP development is distinct from traditional models, focusing on product-first strategies that leverage social media and digital marketing [24][26] Consumer Behavior and Market Trends - The appeal of LABUBU is linked to emotional engagement and the desire for unique collectibles among younger consumers, particularly Generation Z [19] - The phenomenon of LABUBU has led to a rise in 3D printing models, as consumers seek alternatives to purchasing the physical toys [27] - The brand's success is attributed to its ability to resonate with cultural trends and consumer desires, positioning itself as a leader in the collectible toy market [26]

Core Viewpoint - The promotion of new consumption is crucial for boosting domestic demand, with private enterprises playing a significant role in this transformation through innovation and new business models [1][4]. Group 1: Legislative Support - The Private Economy Promotion Law aims to foster the healthy development of the private economy and ensure a stable, transparent, and predictable business environment [2][3]. - This law establishes a legal framework that eliminates concerns over policy fluctuations, thereby enhancing market expectations and stimulating the potential of the private economy [2][3]. Group 2: Financing and Investment - The Private Economy Promotion Law addresses financing bottlenecks by promoting a multi-tiered capital market system, allowing qualified private enterprises to access direct financing through stock and bond issuance [3][4]. - Capital markets are expected to provide essential support for innovative private entities, enabling them to secure timely financing for growth [3]. Group 3: Innovation and New Consumption - The law encourages private enterprises to adopt new technologies and develop new products, services, and business models, which are essential for enhancing supply quality [4][5]. - Companies are increasingly focusing on emotional value in consumer products, targeting younger demographics with innovative and differentiated offerings [4][5]. Group 4: Supply Chain Optimization - Companies like Three Squirrels are leveraging digital supply chain systems to enhance production efficiency and reduce costs, aligning with the trend of high-quality, cost-effective products [5][6]. - The integration of digital tools and a focus on high-quality sourcing are key strategies for companies to meet the rising demand for personalized and health-oriented products [6].

Core Insights - LABUBU has gained significant popularity, leading to high auction prices and a surge in social media discussions, contributing to a record high stock price for Pop Mart, which exceeded HKD 380 billion in market capitalization [1] - Pop Mart is referred to as an "IP printing machine," with LABUBU driving the growth of the trendy toy market and pushing its stock price to new heights, with a year-to-date increase of over 200% [2] - Multiple financial institutions have raised their target prices for Pop Mart, reflecting strong performance and growth potential in the collectible market [3] Group 1: Market Performance - On June 11, Pop Mart's stock reached a peak of HKD 269.8 per share, marking a new high since its listing, with a total market value of HKD 357.76 billion [2] - The stock experienced a brief trading halt due to a surge, closing at HKD 266.8, with a trading volume of 26.36 million shares [2] - Over the past three months, Pop Mart's stock has increased by over 120%, indicating strong investor interest [2] Group 2: Financial Institutions' Actions - Several banks launched promotional activities offering LABUBU blind boxes with deposits, which gained significant attention on social media [4] - However, these promotional activities were halted due to regulatory concerns regarding compliance with deposit marketing practices [5] - Experts noted that banks are under pressure to attract deposits amid declining interest rates, leading to unconventional marketing strategies [5] Group 3: Industry Trends and Risks - LABUBU represents the "self-indulgent economy," appealing to young consumers' desires for social sharing and personalized expression [7] - The rapid iteration of the trendy toy market raises concerns about LABUBU's long-term sustainability and potential market value decline if interest wanes [7] - Analysts caution that the current high valuation of Pop Mart, at a price-to-book ratio of 30, may indicate speculative behavior similar to past trends in collectible markets, suggesting a risk of financial bubble [7]

Core Viewpoint - Pop Mart's LABUBU brand is experiencing significant success, with high auction prices and a strong market presence, positioning the company as a leader in the "self-indulgence economy" and driving its founder to become the richest person in Henan [3][4]. Group 1: Auction Success and Market Trends - A LABUBU collectible was auctioned for 1.08 million yuan, while a limited edition sold for 820,000 yuan, highlighting the brand's appeal and market demand [2]. - The LABUBU series has gained international attention, with celebrities endorsing the brand and driving sales [4]. - The "Born to Bond" series, a collaboration with the film "Nezha 2," has sold over 100,000 units on Tmall, indicating strong consumer interest [4]. Group 2: Brand Strategy and IP Management - Pop Mart's success is attributed to its unique approach to IP management, treating each product line as an "artist" and focusing on emotional engagement with consumers [7][11]. - The company's brand value has significantly increased, reaching 10.344 billion yuan in 2025, a 103.2% rise from 2024 [8][9]. - Pop Mart has established a global network of over 350 artists, with 13 IPs generating over 100 million yuan in annual revenue [10]. Group 3: International Expansion and Revenue Growth - Pop Mart's overseas revenue surged from 1.066 billion yuan to 5.07 billion yuan, a 375.2% increase from 2023 to 2024, indicating strong international demand [13]. - The LABUBU brand has seen remarkable success in Southeast Asia and is expanding into Western markets, with significant sales in locations like Los Angeles and London [12][13]. - The company's strategy emphasizes product line branding over corporate identity, facilitating better acceptance in international markets [13].

Core Viewpoint - The article highlights the rise of Pop Mart, which has surpassed traditional industries in wealth rankings, particularly overtaking the previous top billionaire in Henan, Qin Yinglin, through its innovative approach to consumer products and branding [3][10][22]. Group 1: Company Performance - Pop Mart's stock price has surged by 174% this year, with a staggering increase of over 11 times since the beginning of 2024, reaching a closing price of 250.8 HKD and a market capitalization of 336.8 billion HKD [10][12]. - The founder, Wang Ning, has seen his wealth increase to 205 billion USD, surpassing Qin Yinglin's 163 billion USD, making him the richest person in Henan [10][12]. - The success of Pop Mart is attributed to its deep operational strategy around intellectual property (IP), particularly the Labubu character, which has resonated with the younger generation [16][18]. Group 2: Market Dynamics - The article discusses the competitive landscape, noting that traditional industries like pork production have been challenged by new consumer brands like Pop Mart and others such as Honey Snow Ice City [3][4][5]. - The rapid growth of Pop Mart's overseas revenue, which increased from 1.066 billion CNY in 2023 to 5.07 billion CNY in 2024, indicates a successful expansion strategy targeting young consumers in Europe and America [19][20]. - Analysts predict that the Labubu IP could become a "super IP" comparable to Hello Kitty, with projected sales growth from 3 billion CNY in 2024 to 14 billion CNY by 2027 [20]. Group 3: Consumer Trends - Pop Mart's strategy focuses on selling emotional value rather than just toys, appealing to Gen Z's desire for individuality and emotional connection [16][18]. - Limited edition and collaborative products, such as the Labubu items, have become highly sought after in the collector's market, with prices skyrocketing in secondary markets [19][20]. - The article notes a potential risk of market saturation, as consumer preferences may shift rapidly, similar to past trends in collectible markets [22].

Group 1: Macro and Strategy - The report discusses the "Self-Indulgence Economy" in China and Japan, highlighting the growth and valuation differences between Chinese companies in this sector and their Japanese counterparts, with Chinese firms generally in a rapid growth phase compared to Japan's mature companies [7][8] - Key investment logic includes leveraging the time advantage of development stages, innovative business models, rediscovery of cultural values, and technology-driven differentiation in competition [8] Group 2: Industry and Company Analysis - The retail industry report indicates that the 618 shopping festival showed stable performance, with significant growth in sales and user engagement on platforms like JD and Tmall, where brands like Perleya and Maogeping performed well [10][11] - The report on Xuguang Electronics (600353.SH) highlights a 20.5% year-on-year revenue growth in 2024, with a focus on power equipment, military, and electronic materials, and a notable increase in R&D spending [13][14] - China Jinmao (00817.HK) is noted for its diversified business structure and successful turnaround in 2024, driven by reduced inventory impairment and improved gross margins, with a strong focus on urban and property development [15][16]

Group 1: Consumption Growth in Central and Western Regions - The consumption growth momentum in central and western provinces is strong, with 11 out of 17 provinces showing retail sales growth above the national average in the first four months of the year [1][2] - Hubei and Henan provinces have retail sales growth rates of 7.7% and 7.2%, respectively, exceeding the national average by 3 percentage points and 2.5 percentage points [2][3] - Experts suggest that central regions should focus on regional collaboration, industry linkage, and policy innovation to transform consumption growth into lasting industrial competitiveness and regional influence [3] Group 2: Impact of "Two New" Policies - The "Two New" policies have significantly boosted sales in communication equipment, home appliances, and audio-visual products, contributing to retail sales growth [4] - As of May 31, 2025, the "Two New" policy has driven sales of 1.1 trillion yuan across five major categories, with approximately 175 million subsidies issued to consumers [4][5] - In the first four months of the year, at least 16 provinces reported retail sales growth in communication equipment exceeding the national average, with some western provinces showing over 50% growth [4] Group 3: Sports and Cultural Events Driving Consumption - Retail sales of sports and entertainment products have seen significant growth, with some regions reporting increases over 25% in the first four months [6] - The sports industry has expanded from 2.9 trillion yuan in 2019 to 3.7 trillion yuan, driven by government support and youth consumer trends [6] - Events like the "Su Super" football league have boosted local economies, with a reported 14.63% increase in tourism spending during the Dragon Boat Festival [6][7]

Core Insights - The domestic "self-indulgence economy" shows characteristics of high growth, high valuation, and high differentiation compared to Japanese counterparts, indicating a significant developmental stage difference and valuation premium [2] - Chinese companies are generally in a rapid growth phase with revenue growth rates significantly higher than those of mature Japanese companies, while gross margins are comparable or even superior [2] - The report highlights the need to identify leading companies with competitive advantages to maintain valuation premiums and achieve long-term value creation in a context of intensified competition and slowing growth [2] Section Summaries 01 Japan's Self-Indulgence Consumption Wave - Japan's consumption society has evolved through four stages, reflecting specific economic, social, and cultural contexts, providing a framework for understanding the evolution of the self-indulgence economy [4] - The current transition in China mirrors Japan's historical consumption patterns, positioning it for rapid growth in the self-indulgence economy [4] 02 The Rise of New Consumption in Japan - The emergence of the self-indulgence economy in Japan has been gradual, transitioning from basic needs to a focus on spiritual satisfaction and self-realization [5] - The report discusses the impact of cultural shifts on consumption preferences, particularly among younger generations [5] 03 Development Path and Future Outlook of Domestic Self-Indulgence Consumption - The report outlines four key investment logic areas for the domestic self-indulgence economy: developmental stage advantages, innovative business models, cultural value rediscovery, and technology-driven differentiation [2] - It emphasizes the importance of a core-satellite investment strategy, focusing on leading companies with clear competitive advantages and exploring undervalued quality targets [2] Japanese Self-Indulgence Economy Development - Japanese companies have transitioned from product-oriented to IP-oriented and from manufacturing-driven to culture-driven models, showcasing the importance of brand heritage and innovation [52] - The report provides examples of successful Japanese companies, highlighting their IP value, global presence, and robust profitability [53] Consumer Behavior Trends - The report notes a shift in consumer behavior among Japan's younger generations, moving from seeking social recognition to prioritizing personal satisfaction and identity through consumption [7] - This trend reflects a broader cultural shift towards community-based consumption, facilitated by social media and shared interests [7] Industry Case Studies - Shimano's case illustrates the potential for significant stock price appreciation driven by strong business fundamentals and market positioning, with a notable CAGR of approximately 23.6% over a significant period [57]

Investment Rating - The report does not explicitly provide an investment rating for the skincare industry Core Insights - The skincare industry in China is undergoing a transformation driven by consumer demand for personalized and sustainable products, with a focus on ingredient innovation and technological integration User Profiles - The male skincare market is evolving towards personalized skincare solutions, moving from basic care to more specialized needs such as oil control and acne treatment, with the market expected to reach 15.6 billion yuan by 2024 [19][20] - The Z generation views skincare as a form of self-expression and emotional engagement, with a strong emphasis on cultural identity and social belonging [14][18] - The infant skincare market is rapidly growing, driven by the new parenting philosophies of the "90s" and "Z generation," focusing on safety and scientific formulations [22][25] Ingredient Trends - The plant-based skincare market is entering a phase of innovation characterized by ingredient upgrades and sustainable practices, with a focus on herbal extracts and advanced extraction technologies [26][27] - The top plant extracts in demand for 2024 include Centella Asiatica, licorice root, and purslane, indicating a shift towards natural and effective ingredients [27][28] Technological Innovations - AI technology is transforming the skincare industry from a traditional model to a data-driven ecosystem, enhancing efficiency and enabling personalized skincare solutions [38][40] - The integration of AI in product development is reshaping the research and development processes, allowing for more tailored consumer experiences [39][40] Consumer Concepts - Emotional skincare is emerging as a new concept, combining psychological and sensory elements to enhance the skincare experience [44][46] - The philosophy of minimalist skincare is gaining traction, emphasizing precision and efficiency over excessive product use [53][55] - Sustainable packaging is becoming a priority for consumers, with a significant portion willing to pay a premium for eco-friendly packaging solutions [58][59]