As new consumption stocks continue their rally, fund managers are split on the sector’s outlook. Xie Tianyuan of Penghua Fund remains bullish, noting that while short-term overheating exists, structural opportunities persist throughout 2024. He anticipates the market becoming more polarized, with winners increasingly differentiated from speculative plays.
Xia Junjie of Renqiao Asset offers a more cautious take, warning of clear bubbles in stock valuations. The sharp price surges in Gen Z-focused consumer stocks have outpaced fundamentals, particularly for companies with unproven profitability models. This divergence highlights the challenge of balancing long-term thematic potential against short-term valuation risks.
The debate reflects a broader market tension between chasing momentum and maintaining valuation discipline. While demographic trends favor new consumption, current prices appear to discount years of perfect execution. The coming earnings season may determine whether these stocks can grow into their valuations or face significant corrections.
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