In-depth Analysis of Investment Value in Hong Kong Stock Market Consumer Sector (2025)

The current price-to-earnings (PE) ratio of the Hang Seng Consumer Index is approximately 17.16 times, at the 12.82% historical percentile, which is a clearly undervalued range. Compared to the historical mean and median, there is obvious room for valuation recovery [0].

• Current valuation percentile: 12.82% (low)
• Significant valuation advantage over history provides a good safety margin for medium-to-long-term layout.

Since 2024, the Hang Seng Index has fluctuated upward from approximately 17135 points to around 25819 points, with an interval increase of about 50.7%, indicating structural opportunities in the market after valuation recovery [0].

In the same period, the Hong Kong stock market showed structural differentiation, with capital concentrating on high-quality assets. From an annual perspective, 380 stocks doubled their prices within the year, and 13 stocks rose by more than 10 times, mainly concentrated in three main lines: biomedicine, technological transformation, and new consumption, reflecting the market’s preference for segment leaders and high growth [1].

The above chart shows: Since the beginning of 2024, there have been significant differences in the trends of core targets related to Hong Kong consumer sector. Tencent (0700.HK) increased by over 100% in the interval, Xiaomi (1810.HK) increased by over 150% in the interval, and Kuaishou (1024.HK) performed relatively steadily. The internal differentiation of the sector highlights the elasticity of ‘new consumption’ and the defensive attributes of ‘traditional consumption’, which also provides a basis for subsequent allocation strategies.

Against the background of coexistence of current low valuation and structural opportunities, it is recommended to adopt a portfolio strategy of ‘defense over offense’:

• Defensive end (about 40%)
  : Traditional consumption (low valuation + high dividend)
• Offensive end (about 60%)
  : New consumption (growth-driven)

Traditional consumer enterprises have stable cash flow, high dividend yield, and defensive characteristics in economic uncertainty, making them suitable as ballast stones for the portfolio [2].

• Valuation advantage: The current PE (TTM) of the Hang Seng Consumer Index is still in the historically low range, providing a safety margin [0].
• Policy environment: Macro-level consumption support policies continue to be introduced, which helps restore consumption scenarios and repair corporate profits [2].
• Allocation value: Provides stable cash flow and defensive buffer in the portfolio.

New consumption represents the trend of consumption upgrading and innovation, including trendy play IP, smart hardware, content e-commerce, etc. Relevant leaders have brand awareness, product iteration, and channel integration capabilities, with clear growth paths [2].

• New consumption trends: The expansion of segmented tracks driven by the rise of national trends, IP economy, smart consumption, etc.
• Target examples: Pop Mart (trendy play IP economy), Xiaomi (smart hardware and IoT ecosystem), Kuaishou (content e-commerce and live broadcast ecosystem), etc., have leading advantages in their respective tracks.

The left side of the chart shows the sector valuation: the current PE of the Hang Seng Consumer Index is about 17.16x, which is lower than the historical average level and at the 12.82% percentile (historical low). The right side of the allocation strategy diagram shows ‘defense over offense’, achieving a balance between offense and defense with a combination of 40% traditional consumption +60% new consumption [0,2].

• Market value/price: Approximately HK$5.48 trillion, price about HK$603 [0].
• Valuation indicators: PE (TTM) about 22.08x, in a reasonable range [0].
• Financial quality: ROE about 20.29%, net profit margin about29.93%, abundant cash flow [0].
• Technical signals: Currently in a sideways consolidation stage, short-term support around HK$597, resistance around HK$609 [0].
• Financial analysis: Conservative financial attitude, low debt risk, strong free cash flow (about HK$181.8 billion) [0].
• Growth and trend: Interval increase of over100% since early2024, and relatively mild Beta (about0.85), showing stable characteristics [0].

• Market value/price: Approximately HK$1.02 trillion, price about HK$39.22 [0].
• Valuation indicators: PE (TTM) about 20.25x, relatively reasonable valuation [0].
• Financial quality: ROE about18.65%, net profit margin about9.84%, stable operation [0].
• Technical signals: Short-term indicators such as KDJ show oversold signs, support level around HK$38.6, resistance level around HK$41.1 [0].
• Financial analysis: Relatively active financial attitude, low debt risk, stable free cash flow (about HK$32 billion) [0].
• New consumption logic: Continuous volume of automobiles and IoT, the strategy of ‘mobile phone × AIoT × automobile’ continues to advance, providing momentum for medium-to-long-term growth [2].

• Market value/price: Approximately HK$276.17 billion, price about HK$64.6 [0].
• Valuation indicators: PE (TTM) about14.05x, attractive valuation [0].
• Financial quality: ROE about25.40%, significant improvement in profitability [0].
• New consumption logic: Continuous expansion of content e-commerce penetration and live broadcast scenarios, with large room for improvement in user duration and commercialization efficiency.

• Market position and logic: Leader in the IP trendy play track, with strong brand awareness and channel capabilities; continues to benefit from the trend of younger consumption and ‘self-pleasure consumption’ [2].
• Research views: Some institutions regard it as a representative target in the direction of consumption and new consumption in 2026, prompting attention to the progress of its brand globalization and IP matrix expansion [1].
• Risk warning: Relatively high expected valuation, need to pay attention to store expansion, inventory, and IP sustainability.

• Market value/price: Approximately HK$2.71 trillion, price about HK$146 [0].
• Valuation indicators: PE (TTM) about19.81x, moderate valuation [0].
• Financial quality: ROE about12.16%, net profit margin about12.19%, healthy liquidity [0].
• Analyst rating: Overall consensus is ‘Buy’, most institutions give positive ratings [0].
• New consumption logic: Continuous advancement of cloud computing, digital commerce, and globalization layout, providing support for long-term growth.

1. Large room for valuation recovery: The current PE (TTM) of the Hang Seng Consumer Index is about17.16x, at the12.82% historical percentile, with high safety margin [0].
2. Policy and macro environment: Consumption stimulus policies continue to be introduced, and consumption scenarios and corporate profits are expected to gradually recover [2].
3. Structural opportunities: New consumption tracks have outstanding growth, and traditional consumption provides stable returns [1,2].

###4.2 Allocation Recommendations

• Defensive end (about40%): Traditional consumption targets with low valuation + high dividend yield, providing defense and stable cash flow [2].
• Offensive end (about60%): New consumption growth targets, such as Xiaomi, Kuaishou, Pop Mart, etc., to grasp the dividends of consumption upgrading and innovation [1,2].

###4.3 Risk Warnings

• Macroeconomic fluctuations: If terminal demand recovery is less than expected, it may affect the pace of profit recovery of consumer enterprises [2].
• Geopolitical and policy risks: External uncertainties, regulatory and tax policy changes may disturb valuations and profits.
• Individual stock risks: Valuations and expectations of new consumption targets are volatile, so it is necessary to closely track performance fulfillment and IP/product iteration rhythm.
• Liquidity risk: Hong Kong stocks are affected by overseas interest rate and exchange rate environments, so it is necessary to pay attention to Fed policies and capital flow changes [2].

The Hong Kong consumer sector is overall in the undervalued range, with the Hang Seng Consumer Index at about12.82% valuation percentile, providing a good safety margin and recovery space for medium-to-long-term layout. Adopting a portfolio strategy of ‘defense over offense’, with traditional consumption providing defense and new consumption providing elasticity, is a relatively stable allocation idea at present.

• Short-term: Focus on structural opportunities brought by valuation recovery and policy catalysis, and select leading targets and those with stable cash flow [2].
• Medium-to-long-term: Layout new consumption tracks, grasp consumption upgrading and innovation trends, such as smart hardware, IP economy, content e-commerce, etc. [1,2].

[0] Jinling API Data
[1] Yahoo Finance Hong Kong - “Hong Kong Stocks Boom This Year! Guanggangwan Holdings Soars 32.71x to Become the Champion of Gains” (https://hk.finance.yahoo.com/news/港股大年-10倍股札堆-380隻翻倍股-最高漲幅近33倍-122004354.html)
[2] Asdaq Financial News - “China Merchants Securities International Expects Hong Kong Stocks to Move Toward Profit Growth-Driven, with Hang Seng Index Having10% to15% Upside Next Year” (https://hk.finance.yahoo.com/news/大行-招商證券料美國明年經濟保持溫和增長-港股將邁向盈利增長主導-021730564.html)