J.P. Morgan China/HK FTM 29 May 26 China Consumer; Asia Consumer; Futu Holdings; Hong Kong Financials; Xpeng ADR & H; Li Auto ADR & H; China Autos: China Summit and Asia Tour highlights

Research evidence excerpt

J.P. Morgan China/HK FTM 29 May 26 China Consumer; Asia Consumer; Futu Holdings; Hong Kong Financials; Xpeng ADR & H; Li Auto ADR & H; China Autos: China Summit and Asia Tour highlights

Asia Pacific Equity Research

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China/HK 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 - Figure NaN). Valuations are undeniably

“cheap”: beverage, beer, catering, sportswear, beauty and jewelry sit in the bottom decile of their 10-year

ranges (Figure 4), 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.