*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

研报英文原文证据摘录

*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

This material is neither intended to be distributed to Mainland China investors nor to provide securities

investment consultancy services within the territory of Mainland China. This material or any portion hereof

may not be reprinted, sold or redistributed without the written consent of J.P. Morgan.

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.