Despite multiple foreign investment bank downgrades last weekend, Mixue Group surged over 9% in early trading on June 9, leading a broader rally among new consumer stocks. Gu Ming rose more than 7%, while Bruke jumped 18% intraday, demonstrating resilient market confidence in China’s consumer sector.
Analysts attribute the rally to the stocks’ official inclusion in the Hong Kong Stock Connect program, allowing southbound funds to invest starting June 9. This short-term catalyst appears to have outweighed concerns about downgrades, driving strong buying interest. However, medium-term risks remain, including stretched valuations and upcoming lock-up expirations that could pressure share prices.
While the Stock Connect inclusion provides immediate support, investors should remain cautious. Many new consumer stocks trade at premium valuations, and the potential supply overhang from unlocked shares could test the sustainability of recent gains in coming months.
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