Young people "consume millet" has become a new investment trend in A-shares.

The so-called millet refers to a transliteration of "goods"; the millet economy is a new consumer phenomenon that has emerged in recent years, mainly referring to the consumption culture and economic form around secondary dimension IP peripheral products. Simply put, it can be game, anime, novels, or television peripheral products. Millet circle culture has risen and become a consumer force that cannot be ignored, not only supporting a market size of hundreds of billions, but also becoming the direction of recent capital pursuit.

As of the market close on November 25, the three major indices slightly declined, but the "millet economy" concept once again became a highlight during trading.

Specifically, two leading stocks.$Shifeng Cultural Development (002862.SZ)$、$Guangbo Group Stock (002103.SZ)$The entire day saw a limit-up, welcoming four consecutive boards.$Rastar Group (300043.SZ)$、$Guangzhou Wahlap Technology Corporation (301011.SZ)$、$Tangel Culture (300148.SZ)$、$Alpha Group (002292.SZ)$Hit the daily limit. In addition,$Profit Cultural & Creative Group (300640.SZ)$、$Zhejiang Jinghua Laser Technology (603607.SH)$and concepts like Bai Xinglong and others surged. Under the strong performance of individual stocks, the gains for the Animation Game ETF and Film ETF exceeded 2%.

Since September this year, several brokerages including Haitong Sec, Huachuang Securities, China Securities Co., Ltd., Zheshang Securities, and Debang Securities have released research reports related to the 'Millet Economy', hotly discussing new consumer markets. Chen Guo, chief strategist of China Securities Co., Ltd., even proposed 'Effervescing Assets' ($POP MART (09992.HK)$、 $TENCENT (00700.HK)$ It is to reshape the first tier of core assets in china.

A-shares show a characteristic of rapid rotation, often rotating to the point where the market is well known, and the trend quickly ends, prompting netizens to joke: Only after it rises does one know what the 'granary economy' is.

The concept stocks of 'granary economy' have doubled in two months.

Post-95 generation A-Heng (pseudonym) ordered the latest character tin badge from the game 'Light and Night Love.' Although this badge is not expensive, it takes 180 days to be shipped, which means it can only be received six months later.

A significant number of young people like A-Heng enjoy collecting these kinds of badges, making trendy toys a new consumer trend.

Like A-Heng, those obsessed with collecting granaries are referred to as eating granaries, with 'Baji' as the preferred choice for eating granaries, reflecting a faster growth trend. For example, miHoYo's 'Genshin Impact' 'Baji,' has several products with sales surpassing 100,000 or even 300,000 pieces on the Tmall Genshin flagship store, and a single store's 'Baji' sales exceed 5 million pieces.

The frequent sell-out of classic IPs reflects the consumption capacity of young people who eat granaries. How large is the market scale of the granary economy?

According to iResearch data, China's ACG (anime, comics, and games) and its derivative market reached 221.9 billion yuan in 2023, among which the peripheral and derivative market was 102.4 billion yuan. The ACG market has shifted from being driven solely by content production to a dual-driven model involving both content production and peripheral derivative industries. It is expected that by 2029, the ACG industry scale will grow to 590 billion yuan, with a compound annual growth rate of 18%. In terms of user demographics, by 2023, the number of general ACG users in China has surpassed 0.5 billion.

With a market scale of hundreds of billions and even greater potential for growth in the future, A-shares will naturally not miss this theme. Looking at individual stocks, Shifeng Cultural Development, which is associated with the ACG concept, has seen its stock price increase by 144% from September 18 to now, while Guangbo Group Stock has experienced a stock price increase of 112% during the same period, effectively doubling.

The concept stocks related to the 'ACG economy' continue to surge, benefiting both the film and television ETF and the game and anime ETF. According to the top gainers list over the past 60 days, several relevant thematic ETFs have increased by more than 30%, even exceeding 40%.

Two leading brokerages actively discuss the 'ACG economy.'

Classic IP combined with blind boxes, new consumption models led by Pop Mart and Kayiou have attracted the attention of chief analysts. Lin Rongxiong, chief strategist at Anxin, stated that understanding Pop Mart equates to understanding current consumption trends and overseas expansion.

Since the beginning of this year, domestic games such as Black Myth: Wukong and IPs under Pop Mart like 'Labubu' have exploded in the Thai market, enhancing the recognition and revenue growth of domestic anime IP abroad. For example, in the third quarter of 2014, company business data indicated that Pop Mart's revenue grew by 120% year-on-year, mainland income increased by 55% to 60% year-on-year, and overseas market revenue surged by as much as 440% to 445%, with even higher growth rates.

Chen Guo proposed the concept of 'effervescent assets' as early as the beginning of October. He stated that 'effervescent assets' represent companies with low correlation to the old economic cycle, with international operational capabilities, primarily in new consumer services and emotional consumption sectors, and claimed that this would form the 'first tier of core reshaped assets in China'.

The earliest research reports by brokerage analysts on the ACG economy appeared in early September this year. Haitong Sec released two research reports discussing Black Myth: Wukong, Kayiou, and others that trigger further thinking on the ACG economy, focusing on developments in AI and IP derivatives. Huachuang Securities also advised early on to pay attention to the online game product release schedule and offline attention to the high prosperity of the ACG industry.

Zheshang Securities' new consumption team research report points out that the millet economy also injects new vitality into old shopping venues. In January 2023, the Shanghai Bai Lian ZX Creative Experience Center, known as the "first commercial complex in China focusing on dimensional culture," was completed, marking the beginning of a wave of revitalization of the secondary dimension in domestic shopping malls. In the first three quarters of this year, the Bai Lian ZX Creative Experience Center's sales revenue increased by 84% year-on-year, and foot traffic rose by about 40% year-on-year, once again showcasing the potential of the millet economy.

According to incomplete statistics, over 60 core business districts in domestic first- and second-tier cities are gradually creating two-dimensional consumer landmarks. According to 36kr, in addition to Shanghai leading the way, there are at least 220 millet shops in the eating millet area of Peking, and nearly 300 such shops in Guangzhou and Shenzhen combined.

From the perspective of brokerage analysts, the market driven by the current millet economy is rising. The industry has low concentration, with opportunities available in upstream, midstream, and downstream.

Zheshang Securities' research report believes that among midstream operating companies, those closely integrated with the IP industry chain, becoming important participants in IP derivative development, and providing consumers with more differentiated IP experiences will stand out in fierce competition. In terms of downstream retailers, the current domestic retail channels related to the second dimension include millet shops, general merchandise stationery gift shops, Japanese retail stores, card shops, and "two-dimensional + traditional store formats". Well-known chain millet shops generally rely on upstream IP resources, growing rapidly and with strong explosive power, and are in an accelerated store opening stage.

The aforementioned research report indicates that "companies or brands with widespread retail channels are expected to enjoy industry beta in the early stages, while in the medium to long term, core competitiveness will return to product development and selection capabilities, ultimately relying on differentiated product supply."

According to Debang Securities, "millet" as an emerging concept has entered the young consumer group. The penetration of the second dimension and the enhancement of consumer purchasing power drive the expansion of market scale. How will the continuously increasing players grow bigger in the future? The "millet economy" fundamentally relies on IP licensing and operational capabilities, supported by supply chain capabilities, with channels as the key to reach consumers.

Editor/Rocky