*J.P. Morgan Asia FTM 29 May 26 China Consumer: Cheap but unloved; LGES: More order wins; Futu: Moderate miss; HK Financials: Cross-border tightening; Xpeng/Li Auto results; China Summit; Rare Earths Dashboard

Research evidence excerpt

*J.P. Morgan Asia FTM 29 May 26 China Consumer: Cheap but unloved; LGES: More order wins; Futu: Moderate miss; HK Financials: Cross-border tightening; Xpeng/Li Auto results; China Summit; Rare Earths Dashboard

Asia Pacific Equity Research

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Asia First to Market 29 May 2026

Top Stories

| China Consumer, Hong Kong, China (Jessie Xu)

Cheap but unloved – stay selective while waiting for the earnings floor; top picks Nongfu, Anta,

Guming

The MSCI China Consumer weight (including autos and e-commerce) has declined to 29% from 40% at

end-2020 after a ~50% price drawdown. Many investors started 2026 looking for a clean “turn”, but

momentum faded again after Chinese New Year. Consumer Staples and Discretionary now trade at ~16x

and ~13x forward P/E (around 1.5 STD below the 10-year average). Valuations are undeniably “cheap”:

beverage, beer, catering, sportswear, beauty and jewelry sit in the bottom decile of their 10-year ranges,

with 5-7% dividend yields. However, EPS downgrades need to bottom before a durable re-rating can take

hold. We advise focusing on names with limited downside and earlier earnings stabilization. Top picks:

Nongfu (OW) for strong brand momentum and a margin buffer; Anta (OW) for a well-executed multi-brand

portfolio and overseas upside; and Guming (OW) for a continued runway for network growth and improving

brand equity. We assume coverage of 11 stocks in China specialty retail, baijiu and beer; summary of ratings

and price targets on p3.