"Pop Mart and its peers," can they return to the A-share market?

Author | Wang Hanyu

Editor | Zhang Fan

Cover Source | Visual China

On March 6, China Securities Regulatory Commission Chairman Wu Qing stated at the Fourth Session of the 14th National People’s Congress that a more precise and inclusive set of listing standards will be added to the ChiNext Board, explicitly supporting high-quality innovative and entrepreneurial enterprises in new consumption, modern service industries, and other sectors to issue and list on the ChiNext.

This statement was interpreted by the market as a signal that the ChiNext Board is opening its doors wider to new consumption and modern service industry companies.

Previously, due to strict requirements for profitability and “hard technology” attributes on the main board and ChiNext, many leading companies in new consumption fields like Pop Mart and Miniso had to “settle for less” by choosing to list in Hong Kong. If this reform is implemented, it could change investment expectations in the primary market and reshape valuations of the A-share consumer sector.

Why do A-shares “reject” consumer companies?

Looking back at recent years in the A-share IPO market, the sector structure shows a clear “heavy manufacturing, light consumption” characteristic.

According to Tonghuashun data, in 2025, most A-share IPOs are concentrated in manufacturing, with 100 companies accounting for 86.21%. Wholesale and retail only have 3 companies, and information transmission, software, and information technology services only 2.

This structure partly reflects regulatory guidance: consumer companies typically have ample cash flow and less urgent financing needs compared to tech firms. Additionally, some new consumption models initially face doubts due to unstable profit models, further lowering their priority for listing on A-shares.

Currently, the three sets of listing standards for the ChiNext Board also set high thresholds for profitability or revenue. The first standard requires “net profit positive for the last two years with a total not less than 100 million yuan,” the second involves a combination of “market value + revenue + profit,” and the third relaxes profit requirements but still requires “market value not less than 50 billion yuan and revenue not less than 3 billion yuan.”

For fast-growing, unprofitable new consumption companies, these standards are difficult to meet. Especially after the August 2023 “827 Policy,” which slowed the overall IPO pace in A-shares, the limited listing quotas further restrict the space for consumer companies to go public.

Meanwhile, Hong Kong stocks have become the preferred IPO destination for many consumer star companies. In 2025, a total of 119 new stocks listed in Hong Kong, raising a total of HKD 285.693 billion. Among these, the consumer discretionary sector ranked fifth in IPO fundraising, with HKD 4.931 billion.

Wind data shows that as of February 9 this year, 67 consumer companies are queued up in Hong Kong for listing.

Why is A-shares re-embracing “new consumption”?

The recent clear mention of “new consumption” and “modern service industries” by regulators may indicate a shift in attitude toward the consumer sector.

Although A-shares have been cautious about consumer companies, a number of new consumption stocks have emerged in the Hong Kong market.

Take Pop Mart as an example. Despite many institutions believing its valuation was severely undervalued, its stock performed well in 2025, with a cumulative increase of over 110% and an annualized return of 112.79%. Similarly, Guming gained high recognition in Hong Kong stocks, with a 157.24% increase since its February listing last year and an annualized return of 192.61%.

These performances demonstrate that new consumption models not only have sustainable profitability but also generate substantial returns for investors. If such companies return to the A-share market, it could increase residents’ wealth appreciation channels and support the long-term healthy development of the capital market.

On the other hand, the biggest beneficiaries of this ChiNext standard reform may be those already listed in Hong Kong, with proven profitability but undervalued, leading consumer giants.

For example, Pop Mart, a leader in the trendy toy industry, had its valuation suppressed for a long time before 2025. Last year, it experienced a shift from hype to rational valuation correction, with its current dynamic P/E ratio below 40.

According to a report from Pudong International Securities, from early 2026 to now, Pop Mart’s domestic revenue has shown strong growth momentum. It is expected that in January-February 2026, domestic revenue will grow year-on-year by 130%-160%, and revenue in the second to fourth quarters will maintain the scale of the first quarter. The report suggests that Pop Mart’s current valuation is severely undervalued.

If the future ChiNext adds a fourth set of standards allowing eligible companies to relist or spin off, Pop Mart could no longer be limited to a single capital market and could access more diverse global capital operations during its globalization phase.

Returning to the consumer market front, as Generation Z becomes the main consumer force, consumption paradigms are undergoing profound changes. New consumption forms such as self-pleasure, quality, and spiritual consumption not only drive economic growth but also spawn new industrial chains. Supporting these enterprises’ listings can help improve the industry structure of the A-share market and provide residents with investment channels to share the dividends of new consumption.

Expanding exit channels and changing primary market expectations

From an investor’s perspective, if this reform is implemented, it could have a profound impact on primary market investment logic and secondary market valuation systems. These effects will not only be reflected in capital flow changes but will also reshape the valuation framework of the A-share consumer sector.

In the past, investment institutions were cautious about new consumption projects in the primary market because even industry leaders might face unstable profits or innovative models that hinder listing on A-shares.

Adding inclusive standards to the ChiNext Board effectively provides clear expectations for the primary market. This will encourage investors to be more willing to invest early and small, supporting innovative consumer enterprises that are not yet profitable but have high growth potential. In the long run, this will stimulate social capital to invest in new consumption, creating a virtuous cycle of industry innovation and capital appreciation.

Moreover, the valuation of the A-share consumer sector is higher than that of Hong Kong stocks.

Historically, A-share consumer companies generally enjoy higher valuation premiums than their Hong Kong counterparts. Currently, the P/E ratio of A-share consumer stocks often exceeds 30, while Hong Kong consumer stocks are around 18 or below.

For example, Qingdao Beer in A-shares has a P/E of about 18, while China Resources Beer in Hong Kong is about 13; Beibei in A-shares has a P/E of about 46, whereas China Flying Crane in Hong Kong is below 12.

Some leading A-share liquor companies, such as Yanghe, have a P/E of around 37; Shuijingfang about 32; Shede Spirits as high as 111.

Due to the higher weight of retail, catering, and apparel in Hong Kong stocks, their valuations are more sensitive to consumption recovery. Conversely, A-shares mainly focus on essential consumption, making their valuations more resilient.

The valuation gap between the two markets means that once new consumption companies return to A-shares, their market value management space will open up, which is beneficial for enhancing shareholder returns and attracting long-term funds.

For the A-share consumer sector, traditionally dominated by white wines, home appliances, and other blue-chip stocks, the valuation system has been relatively fixed. The influx of new consumption enterprises will change this pattern.

In the future, as more new consumption leaders listed in Hong Kong return to A-shares, the valuation structure of the A-share consumer sector will also face adjustments. Companies with genuine core competitiveness and growth potential will be valued reasonably, while stocks relying solely on concept hype may see valuation bubbles squeezed out. Overall, the valuation system of the consumer sector will become healthier and more rational.

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