Summary in One Sentence
In previous years, billions were invested in domestic consumption and investment, leading to the emergence of numerous companies waiting to go public to realize their profits. In the past two years, these companies have flocked to the Hong Kong stock market. Initially, they benefited from the "consumption recovery" trend, driving up stock prices for companies like Lao Pu Huang Jin, Pop Mart, and Mixue Ice City to record highs. However, as the hype faded, nearly 60% of these companies saw their stock prices fall below their issue prices. The essence of this phenomenon is that the "new concepts" and "high growth" bubbles created in the primary market were burst in the more realistic secondary market of the Hong Kong stock market, leaving only those companies with solid financial performance able to maintain their valuations.
---
Detailed Analysis
1. The Hong Kong Stock Market's Consumption Listing Boom: Not About "Consumption Recovery," but a Matter of "Compulsion"
Many believe that the surge in consumer companies listing in Hong Kong is due to a strong consumer market, but the reality is quite the opposite—90% of these companies had no choice but to list. The years 2019-2021 were the most frenzied for domestic consumption and investment, with billions of funds flowing into the sector. Companies in various industries, from bubble tea to trendy merchandise, could attract investment as long as they promised "chain stores" or "national trend brands." The more losses they incurred or the faster their revenue grew, the higher their valuations. However, investment funds have a "shelf life"; typically, investors must recoup their investments within 5-8 years, and many companies and investors had agreements to buy back their shares if they didn't go public on time. When the consumer investment market cooled in 2022, the A-share market became much stricter for consumer companies, leaving Hong Kong as the nearly only option. In essence, this wave of listings was a last-ditch effort by companies that had been waiting for five to six years to exit the market.
2. Hype Before Listing, Cold Reality After: Different Fates for Three Types of Companies
Before listing, these companies presented their stories in a very appealing light, hoping to capitalize on the "consumption recovery" trend. However, once they hit the market, their valuations plummeted. Among the 23 new listed companies, nearly 60% failed to meet their initial expectations:
- Old-style Consumer Companies: Those like Haitian Flavor Industry and Dongpeng Beverage had stable businesses, with annual revenue and profit growth of 5%-10%, but the Hong Kong market dismissed them, considering their operations (sauce and beverages) as too predictable. Their stock prices remained below their issue prices.
- New Consumer Companies with Overused Stories: Companies like Tong Shifu (cultural products) and Yuan Jie Xiao Mian (fast food) had promised "midlife trendy products" and "Chinese fast-food chains" but failed to impress the market. Their valuations plummeted after their initial success.
- Exceptional Winners: A few companies like Gu Ming and Liumou Mei, which focused on niche markets and solid business models, saw their stock prices double despite facing challenges. Gu Ming's profits grew by 50% in the first half of the year, and Liumou Mei became a leader in a less competitive snack market.
3. The Three Leading Consumer Companies: Different Paths, Different Outcomes
The three companies that drove the Hong Kong consumer market in 2025—Pop Mart, Lao Pu Huang Jin, and Mixue Ice City—now face vastly different situations:
- Pop Mart: Cautiously managed its growth, slowing down after its initial success. It repurchased shares and developed new products, helping it maintain its valuation despite market fluctuations.
- Lao Pu Huang Jin: Went all in on the gold market, accumulating debt and overestimating its gold price gains. Its performance plummeted when gold prices dropped, resulting in a 70% drop in its stock price.
- Mixue Ice City: Reduced its expansion speed to fix operational issues, prioritizing revenue stability over rapid growth.
4. The Hong Kong Market Demands Real Performance
The primary market's approach to consumer investment was more speculative, focusing on total revenue rather than net profit. In contrast, the Hong Kong market is much more pragmatic, evaluating a company's actual profitability. Companies like布鲁可 (Bruko), which relied on a single licensed IP, were discounted due to a lack of original content. Others, like沪上阿姨 (Hu Shang A Yi), were criticized for relying on expansion rather than sustainable profit growth. The Hong Kong market has clearly shown that only companies with solid business models and real profits can survive.
In summary, the bubbles in the domestic consumer sector have burst, and only those that can generate real revenue will continue to be valued in the Hong Kong stock market.