Hexun Investment Advisor Zhang Yiming: Why Are New Consumer Concept Stocks Rallying Together?

The short-term surge in the new consumption sector has become very active, driven by four very important logical reasons. According to Zhang Yiming from Hexun Investment Advisory, the first reason is that the rise of the new consumption sector at this point is a market capital flow switch. Many traditional resource and technology stocks have already reached extremely exaggerated valuations. At this time, chasing gains is clearly unprofitable, so capital has shifted from high-positioned tech and resource stocks to relatively lower-positioned consumption tracks, especially new consumption concepts within the consumption sector, making them preferred targets for capital switching.

The second reason relates to recent important policies. Recently, a series of strategies to stimulate and boost consumption have been introduced. For the first time, consumption has been elevated to a very strategic position. Under these circumstances, consumption may continue to be stimulated by ongoing news. Additionally, with tax reforms, consumption taxes will be transferred to local governments, which means local authorities will have more motivation to promote and stimulate consumption. This is the second very important logical reason for the recent activity in the new consumption sector.

The third point concerns which sectors or stocks within the new consumption sector should be focused on, and what exactly defines new consumption. The first type of new consumption I believe includes consumer stocks with export capabilities. Many consumer stocks target the domestic market, but I think their future potential is limited. Only those with export capabilities—able to expand overseas and earn foreign exchange—can be considered true new consumption stocks. Therefore, one can look for intersections between consumption and export logic, and companies at this intersection are the targets of new consumption. The second type of new consumption is experiential consumption. Remember, current consumption is no longer about drinking or medicine; it’s about young people’s consumption. There’s a saying in the market now: “He who wins the youth wins the world.” Young people, especially post-2000s and post-2010s, are into what? They enjoy the gig economy, IP economy, and experiential consumption, which are very popular and will continue to stay hot. The consumer products we favor now and in the future may not attract capital. Therefore, the final and very important logical point about new consumption is that everyone should pay close attention to what young people like and what they are consuming. The consumption tracks centered on experiential and gig economy models are the future direction of new consumption.

(Edited by: Wang Gang HF004)

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