Investment Value Analysis of Leading Consumer Enterprises Amid the Rise of Domestic Brands

Based on financial data analysis of local consumer leaders and combined with the macro trend of domestic brands’ market share increasing from 66% to 76%, I will systematically analyze investment opportunities in various sub-sectors from two dimensions:

and .

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Company	Market Cap	P/E	ROE	Net Margin	Brand Premium Characteristics
Kweichow Moutai	1.77 trillion yuan	19.68x	36.48%	51.51%	Extremely Strong - Luxury-level pricing power
Wuliangye	426.1 billion yuan	14.99x	20.15%	34.59%	Strong - Dual oligopoly in high-end liquor

• Liquor leaders have
  net margins as high as 34%-52%
  [0], far exceeding global FMCG giants (Coca-Cola’s net margin is about 24%), indicating Chinese local brands have reached
  global top-tier brand premium capability
• Moutai’s ROE reaches 36.48% [0], close to luxury giant LVMH’s level (about 30%), proving local brands’ pricing power in the high-end market
• Valuation Rationality:
  Moutai’s P/E of 19.68x [0] is in a reasonable range; Wuliangye’s P/E of14.99x [0] is relatively undervalued

Company	Market Cap	P/E	ROE	Net Margin	Brand Premium Characteristics
Midea Group	598.3 billion yuan	13.33x	20.25%	9.90%	Strengthening - From OEM to brand upgrading

• Midea Group’s ROE reaches20.25% [0], and its stock price rose44.37% from2024 to 2025 [0], reflecting market recognition of its brand upgrading
• P/E of13.33x [0] is a reasonable valuation in the consumer sector, with
  high cost-effectiveness
• The home appliance track has completed
  import substitution
  and is entering the
  brand premium enhancement period

###1.2 Investment Value Evaluation Framework

1. ROE >20%
   - Verify business model sustainability
2. Net Margin>15%
   - Quantitative indicator of brand premium capability
3. P/E <25x
   - Avoid valuation bubbles
4. Low debt risk
   - Ensure cycle-resilience capability

• Moutai, Midea, and Wuliangye all have a debt risk rating of “low risk” [0]
• Current ratio: Moutai (6.62), Wuliangye (4.59), Midea (1.11) [0], indicating healthy cash flow for leading enterprises

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###2.1

(Net Margin>30%)

####🍶

• Local brands’ CR2 (Moutai + Wuliangye) occupy over80% of the high-end liquor market share
• Foreign brands are almost unable to enter (cultural barriers + consumption habits)

• Moutai’s net margin of 51.51% [0] > Wuliangye’s34.59% [0] > foreign liquor brands (about20-25%)
• Pricing Power:
  Moutai’s ex-factory price/terminal price ratio is only about60%, with huge channel profit margins, verifying brand strength

• Moutai:
  Long-term holding target with anti-inflation capability, reasonable P/E of19.68x [0]
• Wuliangye:
  Relatively undervalued with P/E of14.99x [0], and Q32025 performance below expectations provides a buying opportunity

• Aging consumer group for liquor
• Policy risks (restrictions on official consumption)

###2.2

(Net Margin:10-20%)

####🏠

• Local brands account for over70% of the home appliance market (Midea, Haier, Gree)
• Import substitution is fully realized, and foreign brand share continues to shrink

• Midea’s net margin of 9.90% [0], ROE of 20.25% [0], and 44.37% stock price increase in two years [0] reflect market recognition
• Compared with Gree (net margin ~12%) and Haier (net margin ~7%), Midea is in the middle range

• Midea Group:
  P/E of 13.33x [0] is a low valuation in the consumer sector, with
  outstanding cost-effectiveness
• Successful global layout, overseas revenue accounts for over40%, reducing single-market risk

• Geopolitical impact on overseas business
• Raw material price fluctuations

####📱

• Local brands account for over80% of the mobile phone market (Huawei, Xiaomi, OPPO, vivo)
• But net margins are generally below10%, still competing mainly on cost-effectiveness

• Huawei’s high-end models (Mate series, Pura series) have achieved brand premium
• Xiaomi Auto and Xiaomi SU7’s success shows brand upward breakthrough

Need to focus on Huawei’s industrial chain (unlisted) and Xiaomi Group (Hong Kong stock market)

###2.3

(Net Margin<10%)

####👗

• Local brands in the apparel and footwear track are expected to split the market equally with foreign brands in 2025
• Japanese and Korean markets have local brand shares of 55%-90%, and China still has room for improvement

• Anta Sports:
  Successful multi-brand strategy (acquired FILA and parent company of Arc’teryx), net margin ~15%
• Li-Ning:
  “Guochao” representative, net margin ~12% but volatile

• 2025 is the
  watershed of brand premium
• Brands that can create “cultural identity + functionality” (like Anta) are expected to win

• Rapid changes in consumer preferences
• Inventory management challenges

####💄

• Local brand market share increased from66% in 2012 to 76% in2024
• But CR20 accounts for less than 16%,
  market is extremely fragmented

• Proya:
  Net margin ~12%, ROE over 20%, successful big single product strategy
• Bettni:
  Winona brand positioned for sensitive skin, net margin ~20%

• Local brands have taken the lead in the rise of “ingredient-focused consumers”
• Enterprises that can create “big single products” (like Proya’s Ruby series) have brand premium

###2.4

(Local Brands Hard to Break Through)

####💎

• Local brands are hard to enter (cultural symbols + brand history gap)
• Referring to Japan and Korea, local brands still have low shares in the luxury sector

• Focus on
  new national luxury
  (like Moutai, Chow Tai Fook) with differentiated positioning
• Avoid sub-markets directly competing with LV and Gucci

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###3.1 Three Key Elements for Successful Conversion

Element	Explanation	Case
Cultural Identity	Bind brand to national culture	Moutai (national liquor), Li-Ning (Guochao)
Product Innovation	Technological leadership + functional differentiation	Huawei Mate series (satellite communication), Proya (morning C evening A)
Channel Control	Build own channels to reduce costs	Moutai’s direct sales share increase, Midea’s global channels

###3.2 Conversion Time Cycle (Refer to Japan and Korea Experience)

Track	Share Advantage→Brand Premium	Required Time	Current Stage
Liquor	Completed	20 years	Brand premium maturity
Home Appliances	Completed	15 years	Brand premium enhancement period
Textile and Apparel	In progress	10-15 years	Key breakthrough period (2025)
Cosmetics	In progress	10 years	Brand premium cultivation period
Luxury Goods	Not started	20+ years	Market gap

###3.3 Investment Clock Strategy

1. Home Appliance Leaders (Midea)
   - Low valuation, brand premium verification period
2. Liquor Leaders (Wuliangye)
   - Valuation repair opportunity
3. Cosmetics Leaders (Proya)
   - High growth + brand premium cultivation
4. Textile and Apparel Leaders (Anta)
   - Key period for share counterattack in2025

• Moutai
  - Reasonable valuation but limited short-term growth space
• Emerging Domestic Brands
  - Need to verify brand premium sustainability

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###4.1 Core Investment Logic

1. Certainty Targets:
   Hold leaders with verified brand premium (Moutai, Midea)
2. Growth Targets:
   Layout sub-sector leaders in brand premium breakthrough period (Proya, Anta)

• High ROE Portfolio (>20%):
  Moutai, Midea, Wuliangye, Proya
• Valuation Cost-Effectiveness:
  Midea (P/E:13.33x), Wuliangye (P/E:14.99x)

###4.2 Risk Tips

• Persistent consumption downgrade, brand premium hard to maintain
• Geopolitical impact on export-oriented enterprises

• Liquor: Aging consumer group, policy restrictions
• Home Appliances: Raw material price rise, real estate cycle downturn
• Textile and Apparel: Inventory risk, fashion trend changes

• Some leaders’ valuations already reflect optimistic expectations
• Brand premium below expectations leads to valuation correction

###4.3 Key Monitoring Indicators

Indicator	Liquor	Home Appliances	Textile and Apparel	Cosmetics
Net Margin Trend	↑/maintain	↑	↑	↑
ROE	>30%	>20%	>15%	>20%
Market Share	CR2>80%	CR3>70%	Key in 2025	Fragmented→Concentrated
Brand Premium Status	Extremely Strong	Strengthening	Breakthrough Period	Cultivation Period

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###5.1 Investment Value Ranking

• Kweichow Moutai
  - Global leading brand premium, anti-inflation asset
• Midea Group
  - Low valuation, high ROE, successful globalization

• Wuliangye
  - Valuation repair, one of high-end liquor dual oligopoly
• Proya
  - Cosmetics track leader, successful big single product strategy

• Anta Sports
  - Key period for textile and apparel counterattack in 2025
• Li-Ning
  - Guochao representative brand, need to verify sustainability

###5.2 Core Conclusions

1. Domestic brands have entered the “hardcore breakthrough period” from “share advantage” to “brand premium”
   • Liquor and home appliances have completed conversion
   • Textile and apparel, cosmetics are in key breakthrough periods
   • Referring to Japan and Korea (local brand share: 55%-90%), China still has room for improvement

2. Investment value depends on “brand premium conversion capability”
   • Net Margin>30%: Verified (liquor)
   • Net Margin10-30%: Enhancement period (home appliances, cosmetics)
   • Net Margin<10%: Cultivation period (textile and apparel, consumer electronics)

3. Key Focus in2025
   • Share counterattack in textile and apparel track
   • Valuation repair of home appliance leaders
   • Performance elasticity of liquor leaders

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[0] Jinling AI System Data - Company financial analysis, stock price data, financial indicators (Kweichow Moutai600519.SS, Midea Group000333.SZ, Wuliangye000858.SZ etc.)