Analysis of Valuation Repair in Hong Kong Stock Market's Consumer Sector: Can New Consumption Become the Core Driver?

Based on the latest data analysis, the consumer sector in the Hong Kong stock market is indeed at a historical valuation low:

Company Name	PE(TTM)	PB(TTM)	ROE	3-Month Price Change	Cost-Effectiveness Score (ROE/PE×100)
Xiaomi Group (New Consumption)	20.23x	3.16x	18.65%	-28.23%	92.2
Shenzhou International (Traditional Consumption)	12.72x	2.23x	17.82%	+2.35%	140.1
China Tourism Group Duty Free (Traditional Consumption)	56.17x	3.43x	6.10%	+23.50%	10.9

• New Consumption Representative (Xiaomi):
  PE 20.23x is in a reasonable range, ROE 18.65% shows strong profitability, but the recent drop of -28.23% indicates an oversold signal from the technical side[0]
• Traditional Consumption Representative (Shenzhou International):
  PE 12.72x is significantly undervalued, ROE 17.82% remains excellent, with the highest cost-effectiveness score of 140.1[0]
• Consumption Recovery Representative (China Tourism Group Duty Free):
  PE 56.17x is relatively high, but the year-to-date increase of 49.80% reflects the expectation of consumption recovery[0]

The chart shows a comprehensive comparison of PE, PB, ROE, price change, and cost-effectiveness score of three representative consumer companies in the Hong Kong stock market

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According to the latest market analysis, the user profile of Xiaomi Motors shows the core characteristics of the new consumption group[1]:

• Age Structure:
  Around 30 years old, in the golden period of consumption power
• Educational Background:
  70% have a bachelor’s degree or above, high-quality population
• Family Status:
  Over 60% are single/in a relationship/without children, with high consumption freedom
• Income Level:
  Annual family income of 397,000 yuan, with strong purchasing power

• Independent Consumption Decision:
  No child-rearing burden, more free consumption decisions
• Clear Pursuit of Quality:
  High education leads to emphasis on quality and experience
• Brand Loyalty Cultivation:
  In the period of forming brand preferences, long-term value will be brought once successfully cultivated

• PE 20.23x is in a reasonable valuation range for tech consumer stocks
• ROE 18.65% reflects excellent capital return capacity
• Market capitalization of 1.02 trillion Hong Kong dollars, has become a core target of tech consumption in the Hong Kong stock market
• Smooth progress in the auto business, building a second growth curve

• KDJ indicator shows oversold status, with rebound opportunities
• Current trading range [38.59, 41.09 Hong Kong dollars], at a relatively low level
• Beta 0.96, moderate correlation with the market

• 3-month drop of 28.23%, short-term pressure is relatively large
• Auto business is in the investment period, profit realization takes time
• Intensified competition, fierce market share competition

2025 Hong Kong stock market data shows that new consumption has become one of the three core axes (biotechnology, tech transformation, new consumption)[1]. Key highlights include:

• 380 stocks doubled in price, among which the new consumption sector performed brightly
• The number of red-bottom stocks (price > 100 Hong Kong dollars) increased to 46, an increase of 20 compared to the end of 2024
• New consumption representatives such as Lao Pu Gold (6181.HK) quickly entered the ranks of red-bottom stocks

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• PE 12.72x, significantly lower than the industry average
• PB 2.23x, at a historical low
• ROE 17.82%, sustained excellent profitability
• Cost-effectiveness score of 140.1, leading among consumer stocks

• Current ratio 2.23, quick ratio 1.86, stable financial structure
• Net profit margin 21.16%, excellent gross margin level
• Revenue 16.37 billion Hong Kong dollars, a year-on-year increase of 4.04%

• High performance certainty, core supplier of the global sportswear industry chain
• Low valuation provides a safety margin, suitable for defensive allocation
• Stable dividend yield, abundant cash flow

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According to market analysis, the consumer sector in A-Shares faces different problems from those in Hong Kong[1]:

1. Liquor Industry Not Fully Cleared
   • Valuation digestion is still ongoing
   • Market confidence recovery takes time
   • Channel inventory adjustment pressure

2. Lack of New Consumption Varieties
   • The structure of the A-Shares consumer sector is relatively traditional
   • Low integration of technology and consumption
   • Scarcity of emerging consumption targets

3. Uneven Consumption Recovery
   • High-end consumption is relatively stable
   • Mass consumption recovery is weak
   • Obvious regional differences

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[0]

• Reasonable valuation (PE 20.23x) + High ROE (18.65%) = Cost-effectiveness 92.2
• Xiaomi Motors’ user profile accurately positions high-consumption groups
• The full ecosystem strategy of people, cars and homes is gradually implemented
• Short-term oversold, with rebound opportunities

• Pay attention to auto business delivery data and gross margin
• Short-term volatility is large, it is recommended to build positions in batches
• Set stop-loss levels, control single position size

[0]

• Low valuation (PE 12.72x) + High ROE (17.82%) = Cost-effectiveness 140.1
• High performance certainty, stable cash flow
• Dividend yield provides stable returns
  -突出 defensive attributes, suitable as a portfolio ballast

• Global consumer demand fluctuation risk
• Capacity utilization change
• Exchange rate fluctuation impact

• Offensive Part (30-40%):
  New consumption leaders (like Xiaomi)
• Defensive Part (50-60%):
  Low-valued traditional consumption (like Shenzhou International)
• Flexible Part (10-20%):
  Focus on consumption recovery elastic targets (like China Tourism Group Duty Free)

• New consumption is responsible for valuation repair and excess returns
• Traditional consumption provides safety margin and stable returns
• Dynamic adjustment to maintain portfolio balance

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1. Large Valuation Repair Space
   [0][1]
   • Xiaomi’s PE 20.23x is still lower than internet leaders
   • Technical oversold, rebound demand exists
   • Market consensus on valuation repair of the Hong Kong stock market

2. Rise of New Consumption Groups
   [1]
   • Around 30-year-old highly educated groups become the main consumers
   • Strong demand for quality consumption and experience consumption
   • More rational consumption decisions, but willing to pay for value

3. Policy Environment Support
   [1]
   • Continuous introduction of consumption stimulus policies
   • Policy-friendly in new energy vehicles, smart home and other fields
   • Market consensus on valuation repair of the Hong Kong stock market

4. Market Structure Change
   [1]
   • In 2025, 380 stocks in the Hong Kong stock market doubled, new consumption is one of the axes
   • The number of red-bottom stocks doubled, funds concentrated on high-quality targets
   • Southbound funds continue to flow in, allocation demand increases

1. Profit Realization Pressure
   • Xiaomi’s auto business is still in the investment period
   • Intensified competition, profit margin under pressure
   • Time needed to verify the business model

2. Market Sentiment Fluctuation
   • The Hong Kong stock market is still in the shock phase
   • External macro environment uncertainty
   • Changes in investors’ risk preferences

3. Competition from Traditional Consumption
   • Low-valued traditional consumption has strong attraction
   • Defensive funds prefer certainty
   • Capital competition exists between new and old consumption

Time Period	Expected Performance	Driving Factors
2026 Q1-Q2	Consolidation at Bottom	Macroeconomic environment, policy implementation
2026 Q3-Q4	Valuation Repair Starts	Performance realization, market confidence recovery
2027	Differentiation Emerges	Rise of new consumption leaders, traditional consumption repair

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1. Hong Kong consumer valuation is at a historical low, with high repair certainty
   • Overall PE 17.16, valuation percentile 12.82%[1]
   • Both new and old consumption have repair space, but the rhythm is different

2. New consumption has the potential to become the main driver
   • Targets like Xiaomi have reasonable valuation and definite growth
   • New consumption groups have strong consumption power and clear demand
   • Policy environment and market structure resonate

3. Traditional consumption still has important allocation value
   • Low valuation provides safety margin
   • High ROE ensures long-term returns
   • Suitable for defensive allocation

4. Investment Strategy Recommendation: Defense Over Offense
   • Core positions allocate low-valued traditional consumption
   • Satellite positions allocate new consumption for offense
   • Dynamic balance to control risks

New consumption has the potential to become the main driver of valuation repair in the Hong Kong stock market’s consumer sector, but it needs time and performance verification. At the current stage, it is recommended to adopt a strategy of ‘prioritizing defense over offense’, where traditional consumption provides stable returns and new consumption offers opportunities for excess returns.

[0] Jinling API Data - Valuation, Financial Indicators, Technical Analysis of Hong Kong Stock Market’s Consumer Stocks
[1] Yahoo Hong Kong Finance - ‘Hong Kong Stocks Boom This Year! Guanggangwan Holdings Soars 32.71x to Become the Gainer King’ (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)