On March 9, based on the quarterly review results of the Hang Seng Index series announced by Hang Seng Indexes Company Limited on February 13, 2026, Butong Group (6090.HK) was included in the constituent stocks of the Hang Seng Composite Index and the Hang Seng Stock Connect Index, officially entering the list of eligible securities for Stock Connect.
From this point forward, qualified institutional and individual investors in mainland China can directly invest in Butong Group through the Shanghai and Shenzhen stock exchanges. This enterprise, which targets the core decision-makers of household consumption—referred to as 'Family CFOs'—has now entered the purview of mainstream capital in the mainland.
So, what is the potential value increment that inclusion in Stock Connect can bring? And at this new starting point, what are the investment anchors for Butong Group?
What is the impact of being included in Stock Connect?
The inclusion of Butong Group in Stock Connect primarily affects two dimensions:
Firstly, there is a qualitative change in the investor base. After inclusion in Stock Connect, a vast pool of institutional and individual investors from mainland China can participate directly, breaking the previous dominance of overseas funds in the investor structure. This not only broadens the sources of capital but also introduces an investor group with a deeper understanding of local innovation and market potential.
Secondly, the liquidity discount may be corrected. Some small and medium-cap stocks in Hong Kong often trade at a discount due to insufficient liquidity. The continuous inflow of southbound funds will directly enhance trading activity and improve pricing efficiency. As the proportion of Stock Connect holdings increases, Butong Group's market pricing power is expected to see systematic improvement.
After being included in Stock Connect, where does the focus lie?
Successful inclusion in Stock Connect represents another milestone for Butong Group following its listing on the Hong Kong Stock Exchange. Standing at this new starting point, the company's future investment value must be sought at the intersection of industry trends and core competitiveness.
In terms of industry trends, 'technology reshaping family life' is becoming the new main theme of consumer investment.
The new generation of young parents, particularly the high-net-worth group of mothers often referred to as the 'family CFOs,' are no longer satisfied with basic functional products. Instead, they seek family lifestyle solutions that integrate technological convenience, design aesthetics, and emotional value. This generational shift has given rise to a niche market characterized by both consumption resilience and upgrade potential.
Different groups have strategically entered this market segment. Starting with parenting products crucial to family well-being, their ambitions extend beyond this initial focus. Amid the new wave of productivity revolution driven by artificial intelligence (AI), these groups are poised to transition from being premium home hardware providers to fully embracing AI-driven intelligent, scenario-based, and product-oriented implementations.
Based on this strategic positioning, Butong Group will leverage its years of experience in premium home hardware to continuously advance the industrialization, daily-life integration, and democratization of AI technology. It aims to establish an all-encompassing product ecosystem grounded in the principles of 'family, living scenarios, and AI technology.' The goal is to create a smart home ecosystem that understands users better, facilitates natural interactions, and delivers exceptional experiences. By doing so, the company strives to become a leader in AI-powered, consumer-facing smart applications for home scenarios, ensuring that AI genuinely enters every premium household and serves every aspect of quality living.
Notably, within the current Hong Kong stock market's consumer sector, there is a scarcity of investment targets focused on AI technology for family life. Butong Group’s positioning precisely fills this gap. If AI becomes a key variable reshaping consumer product forms over the next decade, Butong Group could leverage its accumulated expertise to find new growth drivers within the enduring scenario of 'family life,' aligning closely with the areas of interest for capital markets.
From the perspective of the company's fundamentals, three core value pillars form a solid foundation for investment.
First Pillar: High-margin barriers supported by a technological moat.
Butong Group’s essence lies in technological innovation rather than merely being a consumer brand.
As one of the first companies globally to introduce intelligent child safety seats, its products incorporate features such as automatic rotation, smart-sensing angle adjustment, and seat-departure reminders. Additionally, it applies cross-industry materials like Cobra memory foam used in sports cars and aerospace-grade magnesium alloys—materials and technologies traditionally found in high-end automobiles or aerospace sectors—that have been ingeniously adapted to family-parenting scenarios.
This ability to apply advanced technologies from fields such as automotive engineering and consumer electronics to entirely different contexts creates a technological moat that competitors find difficult to replicate. This advantage is directly reflected in financial terms: the company's gross profit margin has consistently remained at approximately 50%, a rare level within the consumer goods sector. This demonstrates its 'technology premium' rather than just a 'brand premium.'
Second Pillar: High repurchase value generated through user ecosystem operations.
The company has built a unique user co-creation ecosystem. By deeply collaborating on product development with over 16,000 influencers and more than 2,000 mothers, it ensures that every new product precisely addresses user pain points. This 'from the users, to the users' model generates exceptionally high user stickiness.
As of June 30, 2025, the company's online membership has exceeded 3.5 million, with overall repurchase rates steadily increasing to over 40%. In an era where traffic dividends are plateauing, this high-quality 'retention' operation capability implies continuously decreasing customer acquisition costs and an expanding user lifetime value: one of the most critical long-term investment metrics for consumer-focused companies.
More notably, the company's expansion from 'durable products' (strollers, car seats) to 'high-frequency consumables' (baby care, feeding supplies) is quietly transforming its business model: high-frequency drives low-frequency, repurchases drive new acquisitions, and user value is being amplified at multiple levels.
The third pillar: global expansion opening up a second growth curve.
Despite the vast market potential for premium household products in China (with the high-end parenting products market projected to reach 45.8 billion yuan by 2028), Butong Group's ambitions extend beyond this.
Currently, the group is extending its 'create differences' brand DNA to major international markets such as Europe, North America, Japan, and South Korea, tailoring development strategies to local conditions. Transitioning from a 'Chinese premium brand' to a 'global technology lifestyle brand,' the group’s globalization is not only about scale expansion but also serves as a core catalyst for reshaping its valuation system, with overseas operations expected to command higher valuation premiums.
From a capital market perspective, the company’s performance certainty combined with its valuation attractiveness is garnering positive attention from multiple brokerages.
CSC Financial Co., Ltd. noted that the company’s future highlights include growth in the number of family CFOs and the launch of more SKUs to increase user ARPU. Revenue for 2025-2027 is projected to reach 1.71 billion, 2.38 billion, and 3.12 billion yuan respectively, with year-over-year growth maintained above 30%, corresponding to PE ratios of 46X, 33X, and 25X, presenting a clear growth trajectory. CMBI Securities initiated coverage with an 'Outperform' rating, emphasizing its clear brand positioning, strong channel development capabilities, and overseas market opportunities driving growth. CITIC Securities similarly recognized its significant growth potential.
Summary.
Butong Group’s inclusion in the Hong Kong Stock Connect program signifies far more than a routine technical adjustment. It means that a Chinese brand centered on 'family life AI technology' has officially entered the core focus of mainstream capital markets, obtaining a 'passport' and 'pricing anchor' from the vast mainland capital market.
Amidst the dual waves of consumer and technological iteration, true investment value arises from deep insights into user needs, continuous investment in product innovation, and steadfast commitment to long-term value. With 'family CFOs' as its core customer base, Butong Group builds a moat through technological barriers and opens growth boundaries with a global perspective, exemplifying a mature growth path in the new consumption era.
Following the launch of the southbound trading link, the influx of capital will not only bolster individual stock valuations but also mark a new value narrative transitioning from 'China's premium brands' to a leader in AI-driven household To C applications. For investors seeking rare opportunities in the consumer technology sector, this could represent a promising starting point for long-term engagement.
