Bank of America Securities published a report stating that, under the baseline scenario, targeted consumer stimulus measures are expected to gradually roll out this year. However, under economic and geopolitical pressures, stronger policies may be introduced later.

Furthermore, the bank believes that domestic demand stocks were affected last year by the impact of "4D (Demand, Deflation, De-inventory, and Splitting)." Although pressure continues, given the low base and the efforts of companies such as strict cost control, the performance of some domestic demand enterprises is expected to recover. Despite the cyclical fluctuations in the industry, there are still some sectors with structural growth potential driven by unique demands (such as health, outdoor activities, experiences, and personal interests) or supply-side drivers.

Bank of America Securities has reduced its earnings per share forecasts for domestic demand stocks for 2024 and 2025 by 4% and 1%, respectively, and has raised the target price for the 16 domestic demand stocks it covers by an average of 6% (with Hong Kong stocks shown in the table below). The rating for Feihe (06186.HK) has been upgraded from "Neutral" to "Buy." Considering corporate earnings per share, policies, and uncertainties between China and the U.S., the bank prefers defensive stocks but remains bearish on Baijiu(Chinese Liquor) stocks.

Stocks | Rating | Target price (HKD)

Anta (02020.HK) | Buy | 110.7 yuan → 95.7 yuan

BUD APAC (01876.HK) | Buy | 10 yuan → 9.6 yuan

CHINA RES BEER (00291.HK) | Buy | 35.5 yuan → 32.8 yuan

Feihe (06186.HK) | Neutral → Buy | 4.6 yuan → 6.5 yuan

Dazhi (01405.HK) | Buy | 78.3 yuan → 91.3 yuan

HAIDILAO (06862.HK) | Neutral | 13.8 yuan → 17 yuan

Heng'an (01044.HK) | Neutral | 30.5 yuan → 23.6 yuan

LI NING (02331.HK) | Buy | 17.5 yuan → 19 yuan

Shenzhou International Group Holdings Limited Unsponsored ADR (02313.HK) | Buy | 85 yuan → 76.6 yuan

Simor (06969.HK) | Underperform | 6.8 yuan → 8 yuan

Qingdao Beer (00168.HK) | Buy | 61.2 yuan → 70.6 yuan

Unified (00220.HK) | Buy | 8.3 yuan → 8.7 yuan