Recently, consumer stocks in the Hong Kong market have seen a strong rebound, particularly MIXUE Ice Cream & Tea (02097.HK), which surged over 80% within two days on February 26 and 27. This surge reflects a strong return impulse from public fund managers after a significant clearing of consumer stock positions. Several bubble tea brands sought IPOs in Hong Kong last year but faced setbacks. However, since mid-February, Guming (01364.HK) successfully listed, and MIXUE set a new record for IPOs in Hong Kong. As of February 26, MIXUE's financing subscription amounted to HKD 1.83 trillion, marking a historic high. These changes further encouraged fund managers' confidence in the consumer sector.

（Source: uSMART HK）

Fund managers generally believe that the valuation of consumer stocks was significantly adjusted downward at the end of last year due to the impact of technology stocks. Additionally, market expectations indicate that terminal consumption will accelerate in 2025, transforming the undervaluation of consumer stocks into demand for allocations and profit-making effects. Over the past year, MIXUE has been heavily sold off by public funds and has faded from the top holdings of most funds. A similar situation occurred with Helen's, which completely exited the list of public fund heavyweights by the end of last year. Simultaneously, once heavily weighted Chinese medicine chains and cosmetics companies also experienced fund clearing and position adjustments.In this context, some fund managers began to adjust their positions based on forward-looking layouts, swiftly shifting from technology stocks to consumer stocks, increasing their investment in consumer goods. Southern Fund has been increasing its holdings in consumer stocks since December last year, particularly in cosmetics companies, leading to significant stock price rises.

Recently, some A-share fund managers have also begun purchasing liquor stocks in the Hong Kong market, reflecting the significant appeal of the consumer sector in Hong Kong. This phenomenon not only changes investors' traditional perceptions of Hong Kong stocks but also indicates that consumer stocks, after a period of sluggishness, have the potential to attract investments. The increased demand from fund managers for the consumer sector is linked not only to the valuation drop at the end of last year but also to the expected robust recovery in terminal consumption in 2025. The manager of the Southern China Emerging Economy QDII fund pointed out that the current consumer internet is moving towards platform development, with future emphasis on performance and investment returns. The manager of the China New Era Consumption Theme Fund stated that in a declining risk-free interest rate environment, opportunities for allocating consumer stocks are gradually emerging. They are focusing on undervalued, high-dividend traditional consumer targets, particularly in liquor and home appliance sectors.

The manager of the GF Brand Consumption Fund also believes that despite structural differentiation in the consumer sector, investment opportunities brought about by new retail reforms are becoming clearer. In the future, they will continue to explore the potential of the consumer retail sector, paying attention to the operational cycles and earnings elasticity of enterprises. Overall, the recovery of consumer stocks in the Hong Kong market demonstrates a rebuilding of market confidence in consumption, making future trends worthy of attention.

How to Trade on uSMART

After logging into the uSMART HK APP, click on the search icon at the top right of the screen. Enter the stock code, such as "02150.HK" to access detailed information, trading history, and trends. Click the “Trade” button at the bottom right, select the “Buy/Sell” function, and submit your order after filling in the transaction conditions.

（Source: uSMART HK）