China Consumer Sector "How to position in a reflationary environment" Peng

研报英文原文证据摘录

China Consumer Sector "How to position in a reflationary environment" Peng

Global Research

4 June 2026ab

China Consumer Sector Equities

ChinaHow to position in a reflationary environment

Food & Beverage

Christine Peng, CFA

Reflation a potential upside catalyst from H226E Analyst

We expect rising reflation expectations in H226 to be a key catalyst for China's christine-y.peng@ubs.com

consumer sector, and for staples in particular. This is underpinned by rising upstream +852-2971 7571

costs and improving demand and supply, which we think has not been priced in. April Nina Jiang

PPI accelerated to 2.8% YoY on rapidly rising energy prices, while CPI rose 1.2% YoY, Analyst

dragged by weak pork prices. We expect CPI to edge up in H226 if hog prices rebound nina.jiang@ubs.com

and high energy prices are partially passed on (see UBS Economists' view). We believe +852-2971 5681

the K-shaped consumption recovery will likely continue in 2026E, driven by: 1) the Veronica Song

household wealth effect as the property market stabilises and stock market gains; and 2) Analyst

rising industrial sector profits. We note accelerating inventory destocking (e.g. baijiu), veronica.song@ubs.com

channel diversification, excessive capacity cuts (hogs and dairy) and industry +852-3712 3899

consolidation in the past two quarters, which should support pricing power and protect Rennie Pan

margins. We believe the market underappreciates the reflation potential, evidenced by Analyst

early pricing actions (e.g. Moutai, Yum China), alongside a possible rebound in hog S1460520030001

prices in H226E. rennie.pan@ubs.com

+86-21-3866 8810

Divergence between companies widened in Q126 Samuel Wang

We summarise Q126 earnings of covered China consumer companies and review one- Analyst