In the second half of the year, new consumption is expected to make another leap, with symbols outside the 'three sisters' leading the way.

In the first half of 2025, the Hong Kong stock market's consumption sector showed divergent trends, with new consumption stocks performing remarkably, including POP MART (09992.HK). $POP MART (09992.HK)$ Along with Lao Puhuang (06181.HK) and MIXUE Group (02097.HK), they formed the "New Consumption ‘Sisters’" whose stock prices have multiplied this year, igniting a wave of enthusiasm for new consumption stocks. $MIXUE GROUP (02097.HK)$Some institutions predict that in the second half of the year, the consumption industry will continue to show moderate recovery, with traditional consumption sub-sectors generally warming up, while emerging consumption sub-sectors are expected to achieve excess growth through structural changes. In fact, with the rise of the "three sisters", the symbols that emerge in the second half of the year may change, and the new consumption sub-sectors are not short on potential opportunities.

The 'new' in new consumption signifies both the transformation of consumption concepts and the rebirth of industrial logic. The core driving force of the new consumption wave comes from a profound change in the consumption outlook of the young cohort, as highlighted in the '2025 Youth Emotional Consumption Trend Report' released by Douyin Mall, which states that emotional value is becoming an important factor influencing young people's consumption behavior. 88.2% of young people feel under pressure, and driven by the consumer mindset of 're-nurturing oneself', industries related to emotions such as trendy toys, cultural tourism, pets, and food and beverages are experiencing rapid development. Since 2013, the average annual compound growth rate of emotional consumption-related industries has been 12%, and it is expected that by 2025, the market size of emotional consumption in China will exceed 2 trillion yuan.

The new consumption surge is reshaping market perceptions.

This summer, the biggest sensation in new consumption is definitely LABUBU. From selling a mint-colored LABUBU for 1.08 million to a limited edition LABUBU that was abandoned by Zhang Chaoyang and replaced by Hu Run with a new car, this little gadget with sharp teeth has successfully helped POP MART make a name for itself. As of July 9th, POP MART's market value has soared from over 90 billion Hong Kong dollars at its IPO to over 358.2 billion Hong Kong dollars. Another representative of new consumption, MIXUE Group, has also performed brilliantly, doubling on its first day of trading on March 3, 2025, and as of July 9, its total market value has surpassed 206.1 billion Hong Kong dollars.

The 'National Spicy Strip' Weilong (09985.HK). $WL DELICIOUS (09985.HK)$In this wave of new consumption investment, Wei Long has not fallen behind. By 2025, Wei Long's stock price surged from 6.7 yuan at the beginning of the year to 14.5 yuan, with a cumulative increase of over 100%. However, Wei Long's growth is not solely driven by consumer trends; it is also due to a high degree of alignment between the company's image and the new consumption culture, along with structural opportunities arising from deep transformations.

From the perspective of product structure, the revenue of flavor noodle products (spicy strips) has maintained stable growth, while the 'second curve' of vegetable products is in a stage of rapid growth. Products like konjac strips generated 3.371 billion yuan in 2024, a year-on-year increase of 59.1%, with revenue share jumping to 53.8%. The Leopard Research Institute's '2024 Overview of China's Konjac Products Industry' shows that the market scale of konjac products in China will exceed 20 billion yuan in 2024, with a compound annual growth rate of 28% over the past five years, far exceeding the overall growth rate of the snack food industry. Wei Long's delicious products occupy a leading market share thanks to large items like konjac strips.

Young people are supporting, building a brand loyalty moat.

Nowadays, in addition to traditional strong products like spicy strips, Wei Long's konjac strips and other 'new force' products have successfully captured consumer minds, earning the nickname 'human cat strips', and also represent a high level of recognition and loyalty from consumers towards the brand. This phenomenon is far from unique; for example, MIXUE Group's low prices and the welcoming attitude towards police officers resting in the store have made fans consistently tolerant of their brand during negative public sentiment, with netizens joking 'Xiaoxue doesn't mind that I'm poor, I don't mind that it's dirty'. The consumer brand loyalty further allows the capital markets to recognize the value of stocks, which in turn drives up stock prices and subsequently enhances brand reputation, creating a virtuous cycle. In contrast, the key to the brand moat built by Wei Long lies in its precise insights into consumer needs and continuous innovation. Wei Long has cultivated a loyal consumer cohort across different age groups, maintaining strong brand and product power while upgrading traditional snack consumption into a cultural experience through a series of marketing activities, such as the 'Wei Long Spicy Strip Festival', to meet the diverse needs of various consumer cohorts.

According to a survey by Sullivan, 55.0% of Wei Long's consumers are young people aged 25 and below, and consumers aged 25-35 have also surpassed 40%. In other words, Wei Long has deeply embedded its product mark into various scenes of public life, evolving into a 'collective memory' for those born in the 80s, 90s, and 00s. Recently, Wei Long's new product, high-fiber beef liver mushroom konjac, topped the Sam's Club new product list, serving as another instance of deeply embedding itself into consumers' various scenarios.

It is worth mentioning that at Wei Long's shareholders' meeting, a special 'minor shareholder' became the focus of the event. This 'minor shareholder' has been a loyal fan of Wei Long's products since childhood, from sharing spicy strips with friends to now providing insights at the shareholders' meeting; Wei Long's products have held an irreplaceable importance in their childhood and future life.

In fact, CICC's latest research report also looks towards the second half of the year, under the context of the government continuously introducing related policies to stimulate domestic demand and boost consumption. The demand for the food and beverage sector is expected to marginally stabilize and improve, with new consumption symbols continuing to show relatively high growth, and the prosperity of new consumption trends such as spicy snacks and healthy drinks is expected to be maintained, driving up valuations in the sector. The performance of sub-sectors like snack food and soft drinks in the second half of the year is looked upon positively, and relevant H-shares recommended include NONGFU SPRING (09633.HK), Wei Long Gourmet (09985.HK), among others.

Major institutions are optimistic about the continuation of high growth in new consumption trends like spicy snacks.

It should also be noted that, in addition to the market providing ample opportunities, WEILONG is continuously refining itself. At the product level, it focuses on key products such as spicy strips and konjac, decisively shedding inefficient SKUs and targeting the core track for the next 1 to 2 years; in terms of organizational optimization, the personnel management mechanism of 'practice, enhance, cut, and recruit' will be fully implemented: on the consumer demand side, continuous deepening of product research and innovation, insight into consumer needs, and leveraging refined channel operations to open up new blue oceans in market share.

The Chinese spicy snack food market has broad prospects. A report from Douyin mentioned that in the new consumption sub-sector, the market scale of China’s flavored snack food category is expected to reach about 274.22 billion yuan in 2024. As a leading player in the Industry, WEILONG, with a solid consumer foundation and continuous innovation capabilities, is expected to become a more potential representative of China's new consumption on the world stage, and its development prospects are worth continuous attention.

Author: Duqi

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