Counterfeit Products: Mr. Song, head of a clothing accessories company in Yiwu, found that scarves labeled as produced by his company were being sold online, despite his company never manufacturing them.

Stock Performance: MNSO's stock was trading at $37.88, down 1.3%, with a significant trading volume of 2.2581 million shares, totaling approximately $85.97 million.

Investment Themes for China's Consumer Sector: Key themes for 2026 include lukewarm end-demand with potential policy stimulus, accelerated industry consolidation due to price deflation, a focus on design and social value among younger consumers, overseas expansion to counter domestic growth weaknesses, and challenges/opportunities from an aging population.

Top Buy Picks by JPMorgan: Recommended stocks include LAOPU GOLD for its gold price and expansion potential, Luckin Coffee for market share and digitization, GUMING for regional diversification, MNSO for strong products and store expansion, Yum China for robust performance, and POP MART for its growth potential and valuation.

Stocks to Avoid: JPMorgan advises against investing in BUD APAC and YANGHE due to their poor performance and high short-selling ratios.

Market Insights: The report highlights the importance of understanding market dynamics, including short-selling data and stock performance, to make informed investment decisions in the evolving consumer landscape.

Market Growth Outlook: China's consumption market is projected to maintain moderate growth through 2026, driven by rationalized consumption and structural differentiation in demand levels.

Investment Strategies: Investors are advised to balance aggressive and defensive strategies, focusing on stable cash flow segments while also exploring high-growth opportunities in the consumption sector.

Key Company Categories: Attention should be given to companies that can improve efficiency and profit elasticity, niche leaders with strong market insights, and industry leaders with robust growth foundations.

Highlighted Companies: Notable companies include SHENZHOU INTL, YILI, POP MART, MNSO, ANTA SPORTS, and CHINA RES BEER, each positioned to benefit from current market trends and demand dynamics.

Stock Performance: POP MART (09992.HK) saw a significant rise of 7.33%, reaching a high of $225 during intraday trading, while MNSO (09896.HK) and BLOKS (00325.HK) also experienced gains of 3.72% and 4.29%, respectively.

Short Selling Data: The short selling ratios for these stocks indicate varying levels of market sentiment, with POP MART at 15.712% and MNSO at 16.657%.

Government Initiative: The Ministry of Industry and Information Technology and other departments have launched a plan to enhance consumer goods supply and demand, focusing on interest-driven products like pet merchandise and art toys.

Expansion of Low-Altitude Consumption: The initiative also aims to promote low-altitude tourism and related activities, ensuring safety and risk control in expanding this market segment.

Financial Performance: MNSO reported a 28% increase in revenue and a 12% rise in adjusted net profit for Q3 2025, reaching RMB5.8 billion and RMB767 million, respectively, aligning with expectations.

Profit Forecasts: CICC maintained its 2025 adjusted net profit forecast at RMB2.9 billion but reduced the 2026 forecast by 4% to RMB3.6 billion due to changes in gross margin and expenses.

Stock Rating and Target Price: CICC retained an Outperform rating for MNSO but lowered its target price to HKD50.18 following industry valuation adjustments.

Market Activity: MNSO experienced short selling of $9.35 million, with a short selling ratio of 16.829%.