AccessibleversionBofAGLOBALRESEARCHBofASECURITIESChinaConsumer(H/AIs China still under-consuming?MythvstruthIndustryOvervlewStats speak!China is NOT that under-consuming24November2025may strugele to explain the weaknessEquitysince 2022, thoughChinalsilloneof the world'sfastest growing major economies.China In our view, nominal value comparisons only tell part of the story. Our quantitative studyConsumer reveals two facts. 1) China'sper capita volume consumption is comparable to globalpees, not ony n gods but lso n core sevies.Coune-nurtvely,Cina eceds theUS, Japan and South Korea in per capita consumption of proteins, eggs,seafood andngKong)veetables. thina s per capita esidental flor spare s above many deveoped countrieThe under-consumption perception stems from low pricing (for structural and cyclicalreasons) and lagging discretionary services. China's pricing is below the global averageLee,CFA>; in most categories (esp for services) and can be <40% of the US in many casesongKong)lee@bofa.comMacro view:some upside, though not that seemingly bigAnother argument n favor of Chinas under-consumption points to China's householangKong)consumption/GDP ofc.40%,< the US(68%),Japan(549>) and South Korea(48%b), InouaAddingc.7% from social transfers;China almost onpar withSouthKorea andnarrowsngKong)That said, there could stll be some upside, particularlyin higherquality and experience-based services or goods. This includes categories like preventive.healthcare,leisure, entertainment and pursut of "dopamine consumption'".1otitongKong)ald.Jeung@bofa.comyvet lowpricesmay paint a seemingly gloomypicturebeta-driven growth is gone, butportunites stllabound. By our definition, E'SG Eficiency;Global. Efficiency means lowest cost/ fastest speed in a low-I win shares. Experience and Service enable penetrationis orjustify premium pricing. Lastly, going global is a viable option, inngKong)rket offers better volumes and pricing thanChina.gle stocks: our cross-sector picksngKong)id to single stocks across sectors. Hence, in partershipinsumer,Intemet,Gaming & Lodging. Tech and Autoofa.comther, topick stocks fiting intoE?SGthemes, Our thematicpicksea Geely. H World. Trip.com, Tencent and Damal(seeour Damalhames normally tick 2-3 boxes of*Efficiency, Experience,Service&re they arelong-temm winners leveraging structural E"SG opportunities.bofacomEconomIs3onttongKong)tain BofASecurltles entitles that takehelenqiao@bofa.comSee TeamPageforList ofAnalystss covered in its researchpstornoudconsiderthisRelatedresearchAnalyst Certification onpage36.PriceChina Consumer(H):Newvs. OldConsumption: imbalance amidstagnation 11August2025
ContentsChina isNOT thatunder-consuming,Highvolumes, especially in goodsExtremely low prices-directpricingMacroview. some upside, but not that seemingly bieDiscretionary and premlum services to unlock potentiaCorporateChina:E25Gopportunities,Mapping ChinaintoconsumercyclesE256-Effciency,Eoperience, Service &GobalEfficiencyExperienceServiceGlobalUniverseof singlestocks:our c...
