Thin Trading Volume Weighs on A-Shares; Consumer Staples Rally

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As of November 26th, the Shanghai Composite Index experienced a slight decline of 0.12%, closing at 3,259.76 pointsThe Shenzhen Component Index also fell by 0.84% to end at 10,333.23 points, while the ChiNext Index reflected a more pronounced drop of 1.15%, with a final closing value of 2,150.10 points.

On the same day, the Wind All A-Share Index recorded a minor dip of 0.67%, accompanied by a trading volume of 1.33 trillion yuan, signaling a reduction compared to the previous day and marking the 40th consecutive day where turnover exceeded one trillion yuanDuring the session, the market opened lower and traded in a narrow range before weakening further in the afternoon, ultimately closing at a recent low, leaving the short-term market direction still uncertain.

Analyzing individual stock performances reveals that over 1,500 companies recorded gains, including 106 that hit the daily limit up; however, more than 3,700 companies posted losses, with 65 reaching the limit down

This discrepancy shows a significant retreat in market sentiment, indicating a drop in investor confidence.

The "millet economy" continues to surgeOn November 26th, the A-shares displayed a temporary pullback, with various industry sectors performing mixedThe office supplies sector led the gains with an impressive 9.03% increase, while sectors such as leisure goods, dining and tourism, banking, food, and agricultural chemicals also posted notable gains.

Focusing on the best performers in the leisure goods sector, stocks like Chuangyuan Shares, Gaole Shares, Shifeng Culture, Aofei Entertainment, Sanbaisuo, and Qunxing Toys saw significant rises, some reaching the daily price ceiling.

From a news perspective, the popularity of the “millet economy” continues to grow

Companies associated with this concept, such as Shifeng Culture and Guangbo Shares, have achieved five consecutive daily limit increasesOn the evening of November 25th, both firms released announcements regarding unusual price fluctuations, mentioning that there had been no significant operational changes in their business environment, nor had any public reports impacted their stock prices with undisclosed significant information.

The millet economy is a burgeoning consumer trend revolving around merchandise derived from two-dimensional intellectual properties (IPs). The term "millet" is a transliteration of the English word “Goods,” as its pronunciation is close to the word for "millet" in JapaneseAt its core, the millet economy transcends mere transactions; it facilitates a cultural and emotional exchange whereby consumers express their affection and loyalty toward particular IPs through purchases and collections

According to a report by Zheshang Securities, two-dimensional derivative products, termed "millet," include merchandise from comics, animations, games, idols, and special effects films, encompassing posters, badges, cards, pendants, standees, figurines, and plush toys.

The market scale of the millet economy has reached the trillion-yuan level, with projections indicating continued growth in the coming yearsData from iResearch Consulting revealed that in 2023, the market size of China's two-dimensional sector hit 221.9 billion yuan, reflecting a year-on-year growth of 27.6%, of which the adjacent and derivative markets accounted for 102.4 billion yuanBy 2029, it is estimated that the two-dimensional industry scale will surge to 590 billion yuan, with a compound growth rate of 18%. In addition, Zhuzhi Consulting anticipates that by 2026, the market for two-dimensional derivative products will reach 160 billion yuan, with product licensing making up 130 billion yuan.

Primarily, the consumer demographic for the millet economy consists of young people, particularly those born after 2000. This group exhibits profound emotional connections and loyalty to two-dimensional culture

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This economic model not only stimulates the sale of related merchandise but also inspires innovation within commercial real estate and retail, such as the establishment of two-dimensional consumer landmarks in prime shopping districts and the integration of two-dimensional elements into retail outlets.

The supply chain related to the millet economy is also expandingThe rising popularity of this trend has attracted significant attention from the market, leading to the proliferation of associated concept stocksThe industrial chain linked to the millet economy includes:

1. **IP Licensing Entities and Content Production Companies**: Companies like MiHoYo, NetEase, and Tencent have made substantial investments in the creation of two-dimensional content and the extension of IPs, deriving commercial gains from the development of diverse merchandise.

2. **Operational Companies**: Such as Bilibili and Guangbo Shares, which focus on IP representation and game distribution, have been pivotal in driving the sales of two-dimensional peripheral products through channel development and content dissemination.

3. **Merchandise Sales Companies**: For example, Pop Mart is recognized as an industry benchmark, leveraging its proprietary IP development and strategic channel-building to foster continuous stock growth, with particularly robust performance in overseas markets.

4. **Toy and Stationery Manufacturers**: Companies like Shifeng Culture and Guangbo Shares specialize in producing smart toys and cultural stationery, as well as two-dimensional peripheral products, thereby capitalizing on the rise of the millet economy

For instance, Shifeng Culture is currently priced at 86.2 HKD per share, with a market capitalization of 115.762 billion HKD and an impressive cumulative growth rate of 332% this year.

5. **Small and Medium Factories**: Numerous small to medium-sized enterprises are pivoting towards the production of two-dimensional peripheral products to meet market demands for personalized and customized offerings, thereby discovering new opportunities in the domain of fan creations.

6. **Commercial Real Estate and Retail Formats**: Various major shopping districts are implementing “millet stores” and “millet markets,” successfully attracting an extensive number of young consumers and enhancing the performance of physical shopping centers.

However, the millet economy is not without its challenges, facing issues such as vague authorizations, shopping fraud, and blind box traps, which may pose risks to the industry's future