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<Research>Daiwa: Encouraging Consumption Performance During LNY Holiday in Mainland; GUMING/ YUM CHINA/ NONGFU SPRING Recommended
Recommend 9 Positive 15 Negative 5 |
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The consumption performance during the Lunar New Year (LNY) holiday was encouraging, with robust demand in the catering and tourism sectors, Daiwa said in a report. It recommended prioritizing stocks that benefit from catering and tourism demand, with top picks being GUMING (01364.HK), YUM CHINA (09987.HK), NONGFU SPRING (09633.HK), TINGYI (00322.HK), CHINA RES BEER (00291.HK), and KWEICHOW MOUTAI (600519.SH). The report noted initial signs of reflation in the Chinese economy, primarily motivated by service consumption, reflected in rising prices and reduced promotional activities in the catering, tourism, transportation, and accommodation sectors. During the 2026 LNY, catering sales beat street consensus. Since YUM CHINA indicated in November 2025 that consumer confidence showed initial signs of improvement, the pace of demand recovery has continued to accelerate. Daiwa continued to name GUMING and YUM CHINA as top picks in the catering sector and noted that if the scope of catering recovery expands, the recovery in alcohol consumption at catering venues may be better than fear. It was also optimistic about NONGFU SPRING and TINGYI, as both were expected to be key beneficiaries of strong domestic tourism demand. However, the broker remained cautious about MIXUE GROUP (02097.HK) due to weakened visibility in profit growth, maintaining a Neutral rating. AASTOCKS Financial News Website: www.aastocks.com |
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