中国奢侈品行业：罕见的奢侈品代理，以本土品牌为首

FoundationMChina/Hong Kong Jewelry RetailersIndustry initiation: Rare luxury proxy, led by local brandsChina's jewelry market has the distinction of being led by local brands and stocks. We highlight three key factors that should drive segment outperformance vs. the broader market, to 2030. We prefer brands with a growing fashion luxury focus, hence CTF (OW) and CTS (OW) over LFX (UW).Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report.+= Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to FINRA restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. June 3, 2021 08:00 PM GMTFoundationMMorgan Stanley Asia Limited+Hildy LingEquity Analyst+852 2239-7834Hildy.Ling@morganstanley.com Contributors Morgan Stanley Asia Limited+Lillian LouEquity Analyst+852 2848-6502Lillian.Lou@morganstanley.comFoundationMLocal brands lead China's jewelry market: Jewelry is an uncommon luxury market in China – wherein local brands take the lead. The top five players in the industry are all domestic brands, accounting for 19% revenue market share in 2019. Further, China/HK jewelry stocks are a rare proxy in HK/China, through which investors can participate in the luxury segment's growth potential.Rising income, premiumization, brand awareness, and Guochao should continue to support local players: We forecast a 9% China jewelry sales CAGR, 2019-30, outperforming the 7.9% overall private consumption CAGR projected in our “Consumption 2030” report. The country's growing middle class and rising disposable income should drive a consumption upgrade and premiumization trend. Despite increasing competition from international brands, we believe local brands should continue to lead. We analyzed brand awareness, heritage, and consumer loyalty of key jewelry brands. Our 2020 AlphaWise survey suggests 70-80% of Chinese luxury consumers recognize key domestic brands, higher than the 55-65% for the top three international jewelry brands. This is partly because key domestic jewelry brands have histories of >90-170 years. Moreover, “Guochao,” i.e., rising preference for local products and design, should support the ongoing leadership of domestic brands, despite rising pressure from international competitors. Affordable luxury on the rise: Rising population and wealth contri-bution from the current 25-34 year-old group during 2020-30 should support affordable luxury sales in the medium term. Affor