Domestic consumer stocks up as ministry stresses need for consumption boost

The Chinese mainland's A-share consumer sector was active once again on Wednesday morning, with food and beverage stocks leading the gains. In Hong Kong, the consumer sector also rallied in early trading, and Yinhua CSI HK Stock Connect Consumer Thematic ETF opened higher.

The Ministry of Commerce on Tuesday emphasized the need to introduce more detailed measures to vigorously boost consumption and to formulate a series of high-quality special plans for the commerce sector.

Analysts said the broad consumer sector is increasingly gaining attention and recognition from investors. With China's consumer price index rising 0.2 percent year-on-year in October, market expectations for a consumption recovery have been lifted.

In a report released on Tuesday, CITIC Securities noted that the combination of low valuations with a stabilization trend under resilient consumption is expected to enhance investor preference for consumer assets.

However, given the still-weak macroeconomic environment, a full recovery in consumption vitality will take time. In the short term, broad-based opportunities in the consumer sector could come from potential fiscal stimulus measures, analysts at CITIC Securities said.

Based on current industry observations, the securities company recommends that investors focus on inflection-point opportunities driven by the wealth effect and supply-side optimization in 2026. These include higher-end consumption areas likely to benefit from the capital market's wealth effect transmission, such as duty-free shopping, outbound tourism, and hotels. Sub-sectors with relatively consolidated supply and improving demand and sound industry structures, such as hog farming, dairy products, catering and catering supply chains, also stand to benefit.

CITIC Securities reaffirmed the importance of long-term positioning based on changes in consumption structure, suggesting investors focus on four directions: new products and categories (emotional and health-related needs), new technologies (AI Plus and biotechnology), new channels (driven by value-for-money requirements), and new markets (international expansion and penetration into lower-tier cities). Key areas include intellectual property-intensive industries, pet products, beauty and fragrance, tourism, outdoor activities, healthy beverages, and AI Plus applications.

Shao Ke, head of the banking and integrated operations team at the BOC Research Institute — the in-house think tank of Bank of China — said that the recently announced recommendations for formulating the 15th Five-Year Plan (2026-30) emphasize the interaction and positive feedback between supply and demand. Efforts to promote consumption will, on the basis of traditional demand, focus more on personalized, diversified, and high-quality new demands arising from people's income growth and consumption upgrading. Meanwhile, technological innovation and industrial upgrading will enhance the supply capacity of products and services, thereby guiding the transformation of potential consumer demand, according to Shao.