1、Disclosures (2) the rise of Chinas DINKs (dual income, no kids); (3) wellness and healthcare for the young; (4) travel; and (5) silver dollars, or how Asians are preparing for retirement. We also select 10 stocks that fit these themes and offer good investment opportunities. Why read this report? We
2、 identify five demographic trends in Asia this allows us to highlight five investment themes and select 10 stocks exposed to these trends B Herald van der Linde*, CFA Head of Equity Strategy, Asia Pacific The Hongkong and Shanghai Banking Corporation Limited .hk +852 2996 6575 * Employed by a non-US
3、 affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations THIS CONTENT MAY NOT BE DISTRIBUTED TO THE PEOPLES REPUBLIC OF CHINA (THE “PRC“) (EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG AND MACAO) Equity Strategy Asia April 2019 2 Why read this r
4、eport? 1 From empty-nesters to DINKs 4 Five themes, 10 stocks 8 Investment themes 17 Chinas DINKs 18 Wellness and health 21 Asias mid-tier cities 26 Silver dollars 29 Demographic trends 33 Urbanisation 34 Household composition 40 Women and work 46 Ageing societies 49 Appendix 53 Disclosure appendix
5、60 Disclaimer 64 Contents 3 Equity Strategy Asia April 2019 R i s i n g p h en om en o n o f D I N K s ( D ou b l e i n c om e , n o k i d s ) a n d g r o w t h o p p o r t un i t i e s f r o m t h e s i l v e r d o l l a r W e ll n es s , h ea l t h c a r e f o r t h e y o u n g , no t t h e o l dH
6、 e a l t h c a r e s p en d i n g i s l o w c o m pa r e d t o t h e d e v e l o p e d w o r l d .H o w e v e r i n A si a s y o u n g e r m i d - t i e r c i t ie s , he a l t h c a r e w i l l g r o wf a s t e r a n d t h e s p en d i n g g a p w i l l c lo s eA s i a s m i d - t i e r c i t i e s
7、 g r o wI n 2 0 1 5 , o n l y 1 2 % l i v e d i n m e g a c i t ie s w h i l e 4 1 % l i v e d i n s m a l lc i t ie s a n d to w n s bel o w 3 0 0 , 00 0 i n ha b i t a n t s . S m a l le r u r ba na r e a s a r e e x pe c t e d t o p o s t f a s t e r g r o w t h t ha n t h e la rg e r c i t ie sA
8、 s i a d e m o g r a p h i c s n a p s ho tS o u r c e: H S B C e s t i m a t e sT h e s i z e o f t h e u r ba n em p t y n e s t p o p u l a ti o n c o u l d in c r e a s e b y a s mu c h a s 8 2 % b y 2 0 3 0 a n d t h i s g r o u p s i n f l ue n c e a s a c o n su m e r m a r k e ts h o u l d g
9、 r o w i n t h e c o m i n g y e a r s . T h e a b se n c e o f f ul l - f l e d ge d p e n s i o n s y s t e m s w i l l t r a n s l at e i n t o w e a l t h a c c u m u l a ti o n a c r o s s A si aC h in a H o n g K o n g K o r e a T a i w a n S i ng a p o r e I n d i a M al a y si a T h a i la n
10、 d I nd o n e si a P h i l i p p i n e s J apa n2 0 1 02 05 0U S D 1 08 t r nO pp o r t un i t i e s f o r w ea l t h ma n a g e r s an d l i f e i n s u r an c e p l a y e r s a s p e n s io n a b l e a s s e t s g r o wH ea l t h c a r e s p e nd i n g a s a % o f G D P C o m p o u n d a n n u a l
11、 g r o w t h r a t e o f G D P , 2 0 1 3 2 0 3 0B y 2 0 1 0 A si a n s h a d a c c u m u l at e d U S D 1 5 t r n i n p e n s i o n a s s e t s a n d b y 2 05 0 t h i s i s e x pe c t e d t o g r o w t o8 2 %o f D I N K s s t at e t h e y w o u l d b u y b e t t e r q ua l i t y pr o d u c t s( he a
12、 l t h , h o l i d a ys , h i g he r - q ua l i t y f oo d s t y pe s , c l o t h i n ga n d s p o r t s w e a r )A ppr o x i m at e l y 4 7 m l i v e i n C h i n e s e h o u se h o l d s w he r e in c o m ee x c e e d s U S D 5 0 , 00 0 p e r a n n u m . Sp en d i n g m a y b e o r i e n t e dto w
13、a r d s a h i g he r q ua l i t y o f l i f e a n d b u y i n g pr op e r t yc 5 %1 0 %1 7 %5 . 25 . 46 .16 . 5A si a J apa n U S 5 mi l l i o n ( p o p u l a ti o n )2 - 5 mi l l i o n 7 5 0 k - 2 mi l l i o n 2 0 0 k - 7 5 0 kK e y t he m e s t o p l a y t h e s e d e m o g r a p h i c t r e n d s
14、Si l v e r d o l l a r sA p o s i t i v e f o r a s s e tg a t he r e r s , l i f e i n s u r e r s ,a n d i n v e s t o r sH ea l t h an d w e l l b e i n gW e l l n e s s , a n d he a l t h c a r es p en d i n g f o r t h e y o u n g ,n o t t h e o l dA s i a m i d - t i e r c i t i e sC o m pa n
15、ie s w i t h s t r o n gd i s t r ib u ti o n n e t w o r k s a n dw i l l t h r i v eT r a v e lS t r o n g d em a n d f o rd o m e s t i c t r a v e l t o c o n n e c tf a s t g r o w i n g u r ba n a r e a sC hi n a s D I N K sB u y i n g b e t t e r q ua l i t ypr o d u c t s a t a h i g he r p
16、r i c ep o i n tEquity Strategy Asia April 2019 4 Myths and misconceptions Welcome to our latest report on demographics, a subject that we believe helps to spot new trends that can have a direct impact on individual sectors. For example, we have long stressed the importance of empty-nesters in China
17、. In this report, we look at another new but related phenomenon the rise of Chinas dual income, no kids (DINKs) category. In a broader context, these trends allow us to understand why premiumisation is such a strong force in China, but not so much in India. It also helps explain why the rate of urba
18、nisation is so much slower in India than, say, Indonesia or China, and how that, again, impacts companies and stocks. Other trends we cover show why ageing supports Asian equities and is not the apocalypse that so many thought it would be. If there is one lesson we have learned from analysing demogr
19、aphics it is that the topic is wrought with misconceptions and biases. Some fear that the worlds population is growing too rapidly, while in fact, according to United Nations World Population Prospects, the global population may reach 10bn in 2050 and then level off. Others worry that the world is g
20、etting older, faster, while actually the same UN report shows that there are more young people aged 10-24 today than at any other time in history. These myths have been around for some time. Some demographers have even started a website to address some of these misconceptions.1 In this report we tak
21、e a step back and look at the bigger picture. We argue that the following demographic developments are key to investors in Asia: Asian urbanisation desakota is a term derived from Indonesian that loosely translates as countryside-town. It defines how urban and agricultural forms of land use and sett
22、lement coexist and intermingle. It also defines a particular type of urbanisation in Asia. For example, its a myth that most people flock to megacities such as Shanghai, Mumbai, Guangzhou, Bangkok or Jakarta. In Asia only 12% live in megacities, while 41% live in smaller cities. Its the urbanisation
23、 in mid-tier cities where all the excitement is think Pune and Chennai in India, Samut Prakan in Thailand, or Makassar in Indonesia. More Asian women are entering the workforce. Female labour participation rates are rising across most of the region. Indonesia in particular has seen improvements but
24、the rate actually fell in India from 42% in 1990 to 34% in 2017. Meanwhile, in China, women tend to work much more often than elsewhere in Asia. Households are shrinking. This is because women marry later or not at all, women have fewer children, and grandparents tend not to live with children as mu
25、ch as in the past. In addition, especially in China, many children are now over 18 years old and have started to leave home to live on their own. 1 29 June 2015 Demographic myths and misconceptions available on the UNA-UK website From empty-nesters to DINKs The analysis of demographics helps us spot
26、 new trends and related investment themes In this report we highlight growth in mid-tier cities in Asia, the rise of Chinas DINKs, healthcare, travel, and silver dollars We select stocks that have exposure to these trends We look at another new but related phenomenon the rise of Chinas dual income,
27、no kids (DINKs) 5 Equity Strategy Asia April 2019 Ageing creates wealth effects. While more care is needed for the elderly, there is a profound wealth effect at play in Asia. Elderly people tend to hold more wealth than the younger generation and more wealth is required to fund an extended period of
28、 retirement. Mid-life issues. Younger nations where most people turn 40 see a faster rise in healthcare spending than in aged societies. This is particularly the case in the ASEAN region. This has a profound impact on peoples consumption and saving behaviour. In this report, we highlight the followi
29、ng investable themes: Asias mid-tier cities grow, household size shrinks. This combination has a profound impact on consumer preferences. What they buy and how will also differ in these new regional centres, so a “one size fits all” product strategy might not work. Retail formats will differ too. Th
30、ose companies with a strong distribution network and an understanding of these regional differences have an edge. Brand and scale are important factors in helping to manage these distribution costs. Stocks that fit this theme are: Ciputra and INOX Leisure The rise of Chinas DINKs. A survey conducted
31、 by HSBC in China (Making money from Chinese demographics: The rise of Chinas empty nesters, published 10 May 2018) concluded that when their child leaves home, 77% of the new empty-nesters enjoy an increase in discretionary income; 82% stated they would like to “trade-up”, i.e., buy better quality
32、products at a higher price point. These products are related to health and wellness, higher quality foods, better hotels, clothing and jewellery. Note that cars did not feature high on the list of product categories for premiumisation. Stocks that fit this theme are: Chow Sang Sang and Sun Art Welln
33、ess, healthcare for the young, not the old. Its in younger countries, not aged societies, where demand for wellness/healthcare grows faster. This is most prominent in ASEAN. In addition, diabetes and Alzheimers disease are two major issues. Surveys suggest that 11% of Chinas population is now suffer
34、ing from diabetes. By 2045, it is believed that India will replace China as having the largest population with diabetes. Stocks that fit this theme are: Apollo Hospitals and TCI Travel. To connect fast-growing, regional urban centres, we see more demand for travel domestically. As per data released
35、by IATA, India was the fastest growing domestic air travel market globally in 2018 with the country seeing 18.6% more people flying within the country than in the previous year. As per IATA estimates, by 2038 China is expected to have 1.5bn travellers, India 478m travellers, and Indonesia 355m trave
36、llers. Stocks that fit this theme are: Samsonite and Sinsegae Silver dollars. Asians accumulate wealth to prepare for retirement. By 2010, Asians already had USD15trn in pension assets, which is expected to grow to USD108trn by 2050. Thus, in Asia, population ageing can raise the ratio of capital to
37、 labour. This makes labour more productive and lifts economic growth. This is positive for asset gatherers, life insurers, selected banks, and stock exchanges. Stocks that fit this themes are: Cathay FHC, Ping An We have done extensive research on demographics in the past. In the next pages, we high
38、light some of these demographic reports and a set of consumer surveys that HSBC analysts have conducted. This has a profound impact on peoples consumption and saving behaviour Equity Strategy Asia April 2019 6 Table 1. HSBC reports on demographic trends across Asia Northeast Asia India ASEAN China F
39、or more details, click on the image Comments Yes, ageing is an issue in Northeast Asia, but wealth accumulation to finance extended life in retirement is a key theme India is young and ageing very slowly. It has the worlds largest youth population. But poor education makes it difficult for them to u
40、rbanise ASEAN urbanisation is unique in that its the mid-tier cities that grow the fastest. Many ASEANs will also enter middle age and will spend more on healthcare The combination of an ageing society, small households (remember, there was a one-child policy) and high female labour participation le
41、ads to the rise of “DINKs”: dual income, no kid households Asias silver dollars Asia An age-old question Sugar, fat, salt and obesity For more details, click on the image Comments Asias ageing has a positive side: we call it the second demographic dividend the wealth effect caused by older people ha
42、ving to fund longer lives New demographic trends hold the key to discretionary spending and travel demand in Asia. Watch out, in particular, for Chinas affluent empty nesters Massive demographic change will favour emerging markets, where there is an abundance of young people over developed ones. The
43、re will be 130m more pensioners in the world in 2020 than in 2015 One in eight adults in the world is obese (FAO). USD500bn is spent on annual agricultural subsidies in the top 21 food-producing countries. 8.5% of the worlds adults have diabetes. This report addresses how this impacts demand and com
44、panies India: Anatomy of the Consumer For more details, click on the image Comments Our survey found that 80% of the respondents are optimistic about the economy for the next 12 months and 45% are very optimistic. Some 41% expect their income to increase by more than 10% and another 39% expect an in
45、crease of at least 5% over the next 12 months. Only 7% feel pessimistic about their economic circumstances. Source: HSBC 7 Equity Strategy Asia April 2019 Table 2. Key proprietary surveys conducted by HSBC in Asia China Food and Beverage: HSBC China Deluxe survey: mixed news for beer and baijiu This
46、 survey found that despite trade tensions and deleveraging, consumers are still upbeat about their income and consumption growth. Services consumption remains a key trend, confirming the view that Chinas services sector growth is organic and sustainable. And, contrary to popular commentary, consumer
47、s are still looking to trade up to better quality. This is not only positive for beer, spirit producers, such as Chongqing Brewery, Moutai and Wuliangye but also Korean cosmetic plays. China Financial survey: Anatomy of a financial consumer In this survey, we found that individuals trust in banks re
48、mains high, while attitudes towards agents and online channels is improving for younger and wealthier individuals, as well as products and services offered by insurers and brokers. Consumers are more influenced by brand, product features, and service quality than price, which should support margins
49、if companies maintain their discipline. Insights are supportive on Banks (ICBC, CCB, and BOC), Insurers (Ping An and PICC P and upgrading the quality of what they buy isnt a priority. This is in line with what our demographics reports highlight and has to do with household compositions. All this has implications for the countrys consumer sector companies, and using the survey, we can draw conclusions about what it means for key s
