Daiwa's research report points out that the trends of various consumer sub-industries in the mainland reflect more intense price competition. Although retail sales in October on the mainland were significantly stronger than the third quarter of this year, government stimulus measures have not yet translated into stronger consumer confidence, with no substantial impact. However, the worst time seems to have passed. The bank indicates a preference for exporters, necessities, and domestic brands with the strongest pricing power such as Proya Cosmetics (603605.SH) and Anta (02020.HK). The bank believes that consumer sentiment has begun to gradually recover, but it may take one to two quarters to see significant changes.

The bank maintains its top stock picks recommended in the previous 'China Consumer Status Report', including Anta, Mengniu (02319.HK), U-Presid China (00220.HK), Shenzhou International (02313.HK), Stella Holdings (01836.HK), Quanfeng Holdings (02285.HK), and Techtronic Ind (00669.HK), all rated as 'buy'.