[LINK] China tech and consumer stocks gained 23% this year :-)

[Stephen Loosley]

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

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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 Süddeutsche Zeitung.