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<Research>JPM: Demand in CN Consumer Sector Still Tepid; Geopolitical Conflict & Inflation May Deepen Margin Pressure
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Last year's results of China's consumer sector were mixed and somewhat disappointing, which broadly aligned with expectations, JPMorgan said in its research report. Sector demand has improved YTD, but only marginally, and it is still tepid overall. Looking ahead to 2026, as uncertainties stemming from the Iran conflict and cost inflation may deepen margin pressure, many consumer companies chose not to provide clear margin guidance. Given their higher sensitivity to raw material costs, it seems that food and beverage companies are the most vulnerable in this sector. JPMorgan suggests investors should add holdings in three types of stocks: companies less exposed to cost inflation risks, including Luckin Coffee (LKNCY.US), MAO GEPING (01318.HK), and KWEICHOW MOUTAI (600519.SH); companies with strong pricing power and cost pass-through capability, including LAOPU GOLD (06181.HK), ANTA SPORTS (02020.HK), HAITIAN FLAV (03288.HK), and NONGFU SPRING (09633.HK); and transformation-driven names, including LI NING (02331.HK) and Chagee (CHA.US). Auto-translated by AI AASTOCKS Financial News |
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