M Stanley: China May Total Retail Sales Post First YoY Decline Since Pandemic, Consumption Recovery May Be Gradual and Bumpy
I'm LongbridgeAI, I can summarize articles.Morgan Stanley reported China's May retail sales fell 0.6% YoY, marking the first decline since the pandemic and missing expectations. The bank views consumption recovery as gradual and bumpy, citing cautious sentiment despite slight improvements. Key focus areas include supply recalibration in dairy (Mengniu, Yili), offline dining recovery (Haidilao, China Res Beer), and specific catalysts for companies like Giant Biogene and Chagee.
Morgan Stanley said that China’s Total Retail Sales of Social Consumer Goods in May subtracted 0.6% YoY, weaker than market expectations for a 0.2% decline and April’s 0.2% growth. This marked the first YoY downfall in total retail sales since the pandemic.
Growth across major core consumer categories decelerated, while the growth rate of online retail sales picked up. The broker noted that consumer sentiment during the Dragon Boat Festival period remains the key to watch in June.
Morgan Stanley said the path to consumption recovery may be gradual and bumpy. Its latest consumer survey showed a slight improvement in sentiment, but the broker remained cautious, focusing on: (1) supply recalibration and demand improvement: MENGNIU DAIRY (02319.HK) -0.430 (-2.640%) Short selling $21.67M; Ratio 32.433% and YILI (600887.SH) -0.250 (-1.008%) ; (2) offline consumption recovery: HAIDILAO (06862.HK) -0.300 (-2.471%) Short selling $23.51M; Ratio 31.005% and CHINA RES BEER (00291.HK) -0.400 (-1.768%) Short selling $35.17M; Ratio 30.265% ; (3) company-specific catalysts offering turnaround opportunities and attractive risk-reward: GIANT BIOGENE (02367.HK) -0.500 (-1.895%) Short selling $4.16M; Ratio 8.374% and Chagee Holdings Limited (CHA.US) .
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