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Today's Topics:
1. China tech and consumer stocks gained 23% this year :-)
(Stephen Loosley)
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Message: 1
Date: Mon, 10 Mar 2025 20:50:58 +1030
From: Stephen Loosley <[email protected]>
To: "link" <[email protected]>
Subject: [LINK] China tech and consumer stocks gained 23% this year
:-)
Message-ID: <[email protected]>
Content-Type: text/plain; charset="UTF-8"
Chinese consumer stocks are back in favour as Mixue rides Hong Kong IPO revival
Consumer stocks have gained 23 per cent this year, according to one Hang Seng
yardstick, as DeepSeek helped with a broader market re-rating
By Yuke Xiein Beijing 3 Mar 2025
https://www.scmp.com/business/markets/article/3300726/chinese-consumer-stocks-are-back-favour-mixue-rides-hong-kong-ipo-revival
Consumer stocks are making a comeback in Hong Kong after the city?s initial
public offering (IPO) market recovered from a multi-year slump and stocks
gained a valuation upgrade induced by DeepSeek?s breakthroughs.
Mixue?s IPO attracted a record HK$1.8 trillion (US$231 billion) of orders from
retail investors before the Chinese fresh drinks chain started trading on
Monday. Cosmetics producer Mao Geping gained 153 per cent since December, while
jewellery maker Laopu Gold has risen more than 1,000 per cent since its debut
in June.
Toymaker Pop Mart has soared 442 per cent over the past 12 months as sales
gained momentum in overseas markets, while peer Bloks Group, whose retail
portion of IPO was 6,000 times subscribed, has advanced 36 per cent since its
first day of trading last month.
?Retail investors? enthusiasm is rooted in the fact that sizeable consumer
companies with solid fundamentals and sector tailwinds have finally emerged
after a lull,? said Richard Lin, chief consumer analyst at Shanghai-based
investment bank SPDB International. ?If you?re a market leader and your
valuation is cheap enough, people are going to clamour for you.?
Consumer discretionary stocks within the Hang Seng Composite Index have risen
23 per cent this year, outpacing the 17 per cent gain of the benchmark Hang
Seng Index. Part of the run-up was fuelled by improved sentiment, after
DeepSeek sparked a bull run in technology stocks and the broader market.
Meanwhile, some analysts said consumer stocks may fail to live up to
expectations if Beijing holds back on injecting further economic stimulus in
the forthcoming two sessions later this month, said Ivan Su, a senior equity
analyst for Morningstar.
?If no major stimulus is introduced, growth for the remainder of 2025 is likely
to remain at current levels,? he said. While this might initially be viewed
negatively by the market, many Chinese consumer stocks ? particularly those
with strong shareholder distribution policies ? still present forcing value.?
For now, investors are indeed looking at the brighter side of the story.
Mixue?s IPO subscription ratio, for one, reflects their confidence in the size
of its business, its brand power and its appealing stock valuation despite the
cutthroat competition in the bubble-tea sector.
[Photo caption: Customers waiting to place their orders at a Mixue bubble-tea
store in Beijing in September 2024. Photo: Reuters]
Other consumer-focused companies appear to be making a beeline for IPOs in Hong
Kong, after the China Securities Regulatory Commission and bourse operator Hong
Kong Exchanges and Clearing both pledged to help more Chinese companies raise
funds in the city, which is Asia?s third-biggest stock market.
Jiangxi Aimei Culture and Technology, which operates a chain of 800-odd Mei KTV
karaoke outlets in mainland China, announced plans last month to list its
shares in Hong Kong, after opening its first outlet in Lan Kwai Fong.
Shanghai-listed Anjoy Foods Group, which sells frozen hotpot ingredients,
submitted its IPO application in January.
Other notable companies in the pipeline include Fashion Momentum group, the
owner of fast-fashion brand Urban Revivo, which was reported to be planning a
US$100 million IPO. Chagee, another mainland bubble-tea chain operator, was
said to be seeking US$300 million in a New York listing.
?More discretionary categories like sportswear have yet to show an acceleration
in sales? with the first-quarter numbers largely in line with the preceding
quarter, Morningstar?s Su said. ?That said, the absence of further
deterioration supports our positive long-term theses for these companies.?
Yuke Xie
FOLLOW
Yuke obtained her BA and MA in Film and Media Studies from Columbia University
in 2019 and 2021. She joined the Post as a business reporter in 2023, following
stints at various media outlets including Mergermarket and S?ddeutsche Zeitung.
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