中国消费者乘势而上——我们重置估值策略

China Consumer Moving with momentum–weresetthe valuationplaybook China ◆Consumer valuations are being driven by earnings momentum,sowe switchfrom DCFto PE, leadingto sharp fallsinmostTPs Lina Yan*, CFAConsumer Analyst, Hong Kong and mainland ChinaThe Hongkong and Shanghai Banking Corporation Limitedlinayjyan@hsbc.com.hk+852 2822 4344 ◆Preferrednames: profit turnaround–Haidilao/Mengniu;stronggrowth–Nongfu/HWorld;2027 inflection–Li Ning/Guming Yimin Wang*Associate, China ConsumerResearch The Hongkong and Shanghai Banking Corporation Limitedyimin.wang@hsbc.com.hk+852 5696 5573 ◆A further boost in shareholder returnsisthe key catalyst; we alsoadjust earnings and downgrade Yue Yuen from Buy to Hold Vania GAI*AssociateGuangzhou Out with DCF, in with PE.It’sstilla bit grim out there.Demand has stabilised butremains subdueddue tomacroweakness andpersistent pressure on middle-classspending.At the same time, geopolitical risks weigh on sector earnings visibility andvaluationsbecause of volatility ininputcosts.TheMSCI ChinaConsumer indexisdown9% y-t-d, underperforming the HSI by10ppts. Themarket is increasingly focused onnear-term earnings, while long-term structural narrativesaboutChina consumptionarereceivinglimited investor attention.Against this backdrop,we believe the valuationdynamics of China consumer stocks haveshifted. WeswitchfromusingDCF–which wehavegenerallyused to value the sectorfor more thana decadeandassumesrelativelystable long-term cash flows–to a target PE-based framework thatwe thinkbettercaptures earnings growth, trading ranges,and potential re-rating/de-rating catalysts. * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is notregistered/ qualified pursuant to FINRA regulations Ournewpreferredstocks.Ourrevised list pivots to a screening frameworkcentred onearningsmomentum.1) Positive earnings momentum driven byprofit turnaround(earnings recovery):Mengniu,supported by raw milk cycle recovery and product mixoptimisation, andHaidilao, which benefits fromimprovedexecution under returningcorporateleadership.2) Companies with strong earnings growth and potential upsidetoconsensusrevisions:HWorldandNongfuSpring, supported by resilient margins andstrongtop-line growth.And 3) 2027 inflection tradeswith valuation support:Li NingandGuming–earnings re-acceleration could emerge in 2027e,andwith de-rating risk largelypriced inthisleavesroom for potential re-rating. Shareholder returns the key catalyst.China consumption growth remainsK-shaped.While a broader diffusion of the wealth effect, supported by early signs of green shoots inthe property market, could support a gradual recovery in mid-tier demand, we believe it ispremature to call for a broad-based sector re-rating. Instead, further enhancements inshareholder returnsremainthe primary stock catalyst, in our view. Stocks.Switching fromaDCF-based valuation toatarget PEapproachresults inmaterial reductions in the potential upside to our target prices;see Figure 3 for old/newTPs across our coverage universe. We revise our2026eearnings forecastsacrossourcoverage–Shenzhou,Guming,Xtep,Pop Mart,Yue Yuen,H World,Nongfu Spring,Laopu Gold,Miniso,CTG DutyFree, andTopsports–bybetween-16%and +15%(seeFigures46-59for changes to estimates for individual companies).We also downgradeour rating onYue Yuen to Hold from Buyafter cutting our target price by 23%. With this report, Yimin Wang assumes primarycoverage of Topsports International. Issuer ofreport:The Hongkong and ShanghaiBanking Corporation Limited Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Investment Research at:https://www.research.hsbc.com Contents Executive summary5 A lack of thematic opportunitiesin 20265 Resetting our valuation framework6Preferred picks based onmomentum screen8 Shareholder returns the majorstock catalyst15 Sector views16 Top-down consumption trend16Valuation has largely discountedthe status quo22Selective consolidationopportunities24Consumption by sector28 Our top picks30Valuation and risks43 Disclosure appendix78 Disclaimer82 Executivesummary ◆Consumer valuations are beingdriven by earnings momentum–so weswitchfromusingDCF tousingPE, leading to sharp falls in TPs◆Our preferred names are: profit turnaround–Haidilao/Mengniu;stronggrowth–Nongfu/HWorld;2027 inflection–Li Ning/Guming◆A sector-wide re-rating maytake time;afurther boost in shareholderreturns should be the key catalyst for stocks A lack of thematicopportunitiesin 2026 Consumer demand isstabilising but notinflecting, pointing to a continued absence of broad-based thematic opportunities.In4M26, Chinaretailsales grew1.9% y-o-y,improving from1.6%in 4Q25, but still below the3.7% 2025level.Whilethe mostpessimisticphase mayhavepassed, the current trajectory suggests stabilisation rather than a growthphase.Consumerconfidenceedged upto 90.0in Mar