China IMF_ Birth stimulus measures_ more comprehensive than expected but subsidy plan below expectation

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the recent measures taken by the Chinese government to support childbearing, which are part of a broader initiative to create a childbearing-friendly society. The measures are seen as comprehensive but the maternity subsidy plan is less favorable than expected [1][2]. Core Points and Arguments 1. Childbearing Subsidy System: The government plans to establish a childbearing subsidy system, with guidelines for local governments to implement the policy effectively. This includes enhancing personal income tax deductions for childcare and education [2][3]. 2. Full Spectrum of Support Policies: The measures include: - Strengthening maternity insurance and parental leave policies - Developing childcare services and improving pediatric standards - Expanding educational, housing, and employment support - Promoting a childbearing-friendly social environment [3]. 3. Implications for Feihe: The maternity subsidy plan is viewed as not straightforwardly positive for Feihe. However, the company is expected to perform well due to: - Stricter regulations on infant formula (IMF) that may accelerate industry consolidation - A solid outlook for the second half of 2024, driven by channel stock replenishment and online growth - Attractive dividends supported by a strong balance sheet [4]. Additional Important Content - The maternity subsidy plan's reliance on local governments raises concerns about the sufficiency of funds to effectively boost fertility intentions [1]. - The overall sentiment towards Feihe remains bullish despite the mixed implications of the new policies, highlighting the company's resilience and growth potential in a consolidating market [4].