“Three-inch throats are deeper than the sea.” J.P. Morgan uses this old Chinese adage to indicate the vast potential growth of the country’s food and other domestic consumption sectors.
The bank predicts that Hong Kong-listed Chinese consumer plays will remain resilient and outperform the broader market in the coming months or years, helped by the country’s increasing wages and rapid urbanisation that allow hinterland residents to take part in the shopping frenzy enjoyed by their counterparts in coastal areas.
Companies that play in the staple or low- to mid-end consumer segment are especially attractive bets. “Unlike the tier-one large-cap China consumer names, which are mostly trading at price-to-earnings ratios of 35 to 40...
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