This year, the new consumption track in the Hong Kong stock market has shown a strong trend, becoming the focus of market attention.
Among them, $Mixue Group (02097.HK)$, $Pop Mart (09992.HK)$, and $Lao Pu Gold (06181.HK)$ are praised by the market as the 'New Consumption Three Sisters' of Hong Kong stocks. These three companies have led a number of new consumption stocks to new highs this year, with Lao Pu Gold up over 232% year-to-date, and both Mixue Group and Pop Mart up over 140%.
The investment logic of emerging consumption stocks increasingly points to one key term - emotional value.
In recent years, the rise of new consumption represented by emotional value and self-pleasure consumption reflects changes in consumer habits and diversification of consumption needs. Consumers are no longer satisfied with the basic functions of products, but are beginning to place more emphasis on the emotional experience and satisfaction during the consumption process.
Media reports indicate that buying a cup of 'Happy Lemonade' and engaging in blind box socializing brings joy, satisfying individual expression and possessing significant collectible value, ultimately catering to 'self-pleasure' needs. Clearly, emotional resonance leads to product premiums, and the emotional consumption of young people has reconstructed the company's valuation logic. In the consumer market, 'whoever wins the youth wins the world' is undoubtedly an eternal truth.
What other new consumption concept stocks are worth paying attention to?
Guangfa Value Core Fund Manager Wu Yuanyi stated that in the new consumption sector, new consumption models are emerging in various fields, such as 'Millet Economy' and domestic trendy consumer goods, reflecting the transformation and progress in the consumption sector driven by the development of the times.
Yongying Emerging Consumption Smart Selection Fund Manager Jiang Weihua stated that each era has its own enterprises, and those companies that are proactive and able to discover unmet consumer needs will always be rewarded by the market. Many traditional consumer categories have already met demand well, while the demand for self-pleasing consumption remains relatively large, and we maintain a positive focus on these new areas.
Futu Information has sorted out some new consumption companies in the Hong Kong stock market for investors' reference:
The Millet Economy includes $Pop Mart (09992.HK)$, $Blucor (00325.HK)$, and $Miniso (09896.HK)$; Beauty and Care includes $Mao Geping (01318.HK)$, $Juzi Bio (02367.HK)$, and $Shangmei Shares (02145.HK)$; Traditional Gold Jewelry includes $Lao Pu Gold (06181.HK)$; Dining and Tea include $Mixue Group (02097.HK)$, $Gu Ming (01364.HK)$, $Cha Bai Dao (02555.HK)$, $Naixue's Tea (02150.HK)$, $Hu Shang Ayi (02589.HK)$, $Wei Long Delicious (09985.HK)$, $Guo Quan (02517.HK)$, and $Da Shi Shares (01405.HK)$; New Energy Vehicles include $Xiaomi Group-W (01810.HK)$, $Li Auto-W (02015.HK)$, $XPeng Motors-W (09868.HK)$, $NIO-SW (09866.HK)$, and $Leap Motor (09863.HK)$, etc.
It is worth noting that most companies have achieved good gains this year. Aside from the three consumption sisters of Hong Kong stocks, Gu Ming and Blucor have risen over 160%, Wei Long Delicious has risen 125%, and Shangmei shares have risen over 100%.
What do institutions think?
According to an article by the Securities Times, foreign investment banks also have a positive outlook on the future prospects of the 'New Consumption Three Sisters' in the Hong Kong stock market. The new consumption track is welcoming structural opportunities, with leading companies that align with the theme of 'emotional consumption' and have increasing brand potential and competitiveness favored by the market.
Morgan Stanley's latest research report raised the target price for Pop Mart to HKD 224, corresponding to a forecasted price-to-earnings ratio of about 40 times this year and 30 times next year, giving it an 'Overweight' rating. Morgan Stanley identifies three main reasons:
Firstly, LABUBU 3.0 has strong global demand, especially in the U.S. market, and it is believed that this can promote Pop Mart to open new stores in the U.S. and other regions, becoming a major growth driver for this and next year; secondly, Pop Mart's supply chain in Vietnam has been rapidly established and is performing well, with most goods exported to the U.S. expected to be shipped from Vietnam in the third quarter of this year, which can mitigate the impact of the cooling U.S.-China trade relations; thirdly, new products in the U.S. have increased prices by 12% to 27%, and they seem to be accepted by consumers, leading to a long-term increase in the average product price, which can improve the profitability of U.S. operations.
Daiwa released a report covering Mixue Group for the first time, giving a target price of HKD 539 and a rating of 'Outperform the Market'. They are optimistic about its growth prospects, primarily based on factors such as economies of scale, leading position in the mass market, and potential for overseas expansion. Daiwa expects same-store sales growth of 5%, 3%, and 3% for 2025–2027, with net profit growth of 22%, 20%, and 18% year-on-year, respectively. Competition from delivery platforms is favorable for Mixue Group's same-store sales growth, with an expected over 10% same-store sales growth in April, supporting the recent stock price.
Regarding Lao Pu Gold, Goldman Sachs recently published a report noting that the management is confident in achieving long-term goals with each store exceeding a total merchandise transaction volume (GMV) of 1 billion yuan, which is more than double the level of 259 million yuan in 2024, and also exceeds the nearly 500 million yuan GMV per store of global luxury brands, including Hermes, in 2023.
The firm raised its net profit forecast for Lao Pu Gold for 2025 to 2027 by 23% to 45%, mainly reflecting the management's optimistic outlook on sales. Management expects sales to grow more than double year-on-year in the first quarter of this year, and the firm anticipates that the company will receive further support from new stores in high-tier cities, partially offsetting the impact of declining gross profit margins and employee stock ownership plan costs. The firm raised the target price for Lao Pu Gold from HKD 553 to HKD 976, maintaining a 'Buy' rating.
Hong Hao pointed out that the Hong Kong stock market is expected to hit a new high in the third quarter, with the technology, consumption, and healthcare sectors being the most attractive sectors, whether due to national policy support or their own profit growth and valuation.
