Overview of the Chinese Consumer Sector
As the Chinese New Year (CNY) holiday approaches, from 28 January to 4 February 2025, UOB Kay Hian provides a detailed outlook on various consumer-driven sectors. Despite a subdued consumption momentum due to macroeconomic uncertainties, there are noteworthy bright spots in home appliances, Macau gaming, movies, and retail. Below is an in-depth analysis of key companies poised to benefit during this period.
Anta Sports (2020 HK)
Recommendation: BUY
Target Price: HK\$120.60
Current Price: HK\$81.50
Upside: 48.0%
Valuation: Trades at 14.6x 2025F PE compared to a target of 21.6x 2025F PE.
Anta Sports remains a key player in the sportswear market, with strong fundamentals and growth potential. The company’s robust valuation metrics and market positioning make it a top pick in the consumer sector. Its discounted valuation relative to its growth outlook positions it as a compelling investment opportunity for 2025.
Haier Smart Home (6690 HK)
Recommendation: BUY
Target Price: HK\$42.00
Current Price: HK\$25.45
Upside: 65.0%
Valuation: Trades at 9.7x 2025F PE compared to a target of 16.0x 2025F PE.
Haier’s domestic strategy is bolstered by the success of the enhanced home appliance trade-in program, which has driven the sale of over 1.037 million units across 12 categories. Internationally, the company is well-insulated from potential tariff hikes, with 60% of its U.S. product sales locally produced and another 20-30% sourced from Mexico. Haier’s focus on subsidies and penetration into lower-tier cities is expected to drive domestic and global growth, making it a strong buy recommendation.
Mengniu Dairy (2319 HK)
Recommendation: BUY
Target Price: HK\$23.50
Current Price: HK\$15.50
Upside: 51.6%
Valuation: Trades at 10.5x 2025F PE compared to a target of 16.0x 2025F PE.
Mengniu’s strong market position and innovative product offerings make it a beneficiary of rising consumer demand for dairy products. Its growth trajectory is supported by favorable consumption trends during the festive season, adding to its appeal as a strategic investment.
Midea (000333 CH)
Recommendation: BUY
Target Price: Rmb106.50
Current Price: Rmb72.82
Upside: 46.3%
Valuation: Trades at 11.7x 2025F PE compared to a target of 17.2x 2025F PE.
Midea stands out as a leader in home appliances, benefiting from favorable national subsidy programs and increasing penetration in lower-tier cities. The company’s strong market presence and operational efficiency make it a top pick for investors looking for stable returns.
Miniso (MNSO US)
Recommendation: BUY
Target Price: US\$31.00
Current Price: US\$22.19
Upside: 39.7%
Valuation: Trades at 14.4x 2025F PE compared to a target of 20.1x 2025F PE.
Miniso is poised to capitalize on increased gifting demand during CNY. Its acquisition of Yonghui’s stake further strengthens its ability to meet consumer preferences for private-label products. Recent store revamps in Shanghai and Fuzhou have shown significant growth, with customer transaction values and foot traffic surging. This positions Miniso as a key beneficiary of the festive spending surge.
Sands China (1928 HK)
Recommendation: BUY
Target Price: HK\$28.60
Current Price: HK\$18.04
Upside: 58.5%
Valuation: Trades at 8.1x 2025F EV/EBITDA compared to a target of 12.0x 2025F EV/EBITDA.
Sands China is expected to benefit significantly from the Chinese government’s relaxed travel policies and diverted tourism demand from Thailand. With Macau’s hotel occupancy rates anticipated to exceed 90% during CNY, Sands China’s Venetian Hotel has seen full bookings for most of the holiday period. Additionally, room rates have surged, ranging from MOP1,500 to MOP4,300. This strong demand positions Sands China as a clear leader in the Macau gaming and hospitality sector.
