China CPI in June remains weak, while the consumption sector is still soft, with selective high-conviction picks favored

Overview

The report focuses on Chinese consumption-related industries. Nomura notes that China CPI in June remained weak, reflecting generally subdued consumption sentiment, while policymakers introduced a framework to promote innovation in retail, emphasizing establishment of a modern retail system by 2030 and supportive actions across land use, financing, taxation, listing support, and competition environment improvements.

Core views

The key view is that in an environment where consumption demand has not clearly recovered, it is not appropriate to be broadly bullish across the entire consumption sector. Instead, investors should pick companies with clear development strategy, visible margin trends, and attractive valuation. The report maintains preference for ANTA Sports Products and Laopu Gold, both rated Buy. ANTA benefits from relative quality and valuation within the sportswear segment, while Laopu Gold’s appeal comes from lower valuation, higher growth trajectory, and improved risk-reward if gold prices stabilize.

Analysis framework

The report uses a framework combining macro consumption sentiment, policy catalysts, stock valuations, and company-level risk-reward. At the macro level, it tracks CPI and consumption sentiment; at the policy level, it evaluates potential impact from retail-support measures; at the stock level, it compares earnings growth, margin trends, valuation multiples, and upside to target price.

Methodology notes

• Valuation methodsP/E Multiple Valuation

  Assesses valuation attractiveness and target prices using forward P/E multiples.

  ANTA's target price of HKD125 is based on a 25x F12M P/E, approximately equal to its five-year average forward P/E; Laopu Gold's target price of HKD1,114 is based on a 22.5x FY26F P/E and is aligned with its relatively higher sales and earnings growth trajectory.

• Rating FrameworkRelative Benchmark Rating

  Buy indicates the analyst expects the stock to outperform its benchmark over the next 12 months.

  Nomura discloses equity ratings on a relative scale; target prices reflect the analyst's estimate of current intrinsic fair value using appropriate valuation methods.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ANTA Sports Products (2020 HK)

  Preferred stock in the sportswear segment, rated Buy.

  Strengths

  Strategic and operating quality are relatively clear, margin trends are visible, and valuation is more attractive after sector correction.

  Weaknesses

  Still exposed to weak overall consumption sentiment and uncertainty in macro demand.

  Comparison

  Target price is based on a 25x F12M P/E, approximately equal to the five-year average forward P/E, with Hang Seng Index as the benchmark.

  Risks

  Intensifying domestic and international competition, slower-than-expected sales growth, and weaker-than-expected macro momentum.

• Laopu Gold (6181 HK)

  Preferred stock in the retail segment, rated Buy.

  Strengths

  Lower valuation and higher sales and earnings growth trajectory; risk-reward is more attractive if spot gold stabilizes in a more relaxed geopolitical environment.

  Weaknesses

  Sensitive to gold prices, consumer sentiment, and fashion-related risks.

  Comparison

  Target price is based on a 22.5x FY26F P/E, with Hang Seng Index as the benchmark.

  Risks

  A sharp weakening of gold prices, fashion risk being higher than expected, and weaker-than-expected macro environment.

Key data

• ANTA Sports Products Current PriceHKD71.75Price date is 2026-07-09; rating Buy.
• ANTA Sports Products Target PriceHKD125Based on a 25x F12M P/E, implying about 74.2% upside.
• ANTA Sports Products Valuation14.0x FY26F P/EThe report states it currently trades at about 14.0x FY26F P/E.
• Laopu Gold Current PriceHKD383.00Price date is 2026-07-09; rating Buy.
• Laopu Gold Target PriceHKD1,114Based on a 22.5x FY26F P/E, implying about 190.9% upside.
• Laopu Gold Valuation7.7x FY26F P/EThe report states it currently trades at about 7.7x FY26F P/E.
• Nomura Global Equity Rating DistributionBuy 58%; Neutral 39%; Reduce 3%From the report disclosure of Nomura Group's global equity research rating distribution.

Impact & implications

For investors, the report sends a message of defensive stock selection rather than a broad recovery trade: weak consumption data limits sector-wide re-rating, but policy support and valuation compression create a window to pick quality stocks. Within sportswear and gold and jewelry retail, companies with clear strategy, visible margins, and reasonable valuation are more likely to deliver relative outperformance.

Risks

• China consumption sentiment remains weak, which may suppress retail and sportswear demand.
• Macro momentum may be weaker than expected, affecting sales growth and margins.
• ANTA faces risks from intensifying competition and slower-than-expected sales growth.
• Laopu Gold faces risks of a sharp decline in gold prices, fashion risk being higher than expected, and a weakening macro backdrop.
• Target-price achievement may be affected by market trends, company earnings deviating from estimates, and additional company or market risks.

What to watch

• Whether subsequent CPI, retail sales, and consumer confidence data show improvement.
• The implementation pace of retail innovation-support policies, including measures on land, financing, taxation, listing support, and competition environment reforms.
• ANTA's sales growth, margin trend, and the intensity of industry competition.
• Laopu Gold's same-store or channel growth, earnings growth, gold price trend, and demand for premium gold jewelry.
• Whether Hong Kong consumer-sector valuations continue to compress and whether high-quality companies offer more attractive risk-reward opportunities.