20151102-高盛-A_smaller_Millennial_generation_of_mothers_creates_an_uphill_battle_11页_686kb

Summary of Document: End of One-Child Policy and Its Impact on Consumer Retail

Core Content

This document provides an analysis of the potential impact of the end of China's one-child policy on the birth rate and consumer retail sector. It outlines the expectation that the policy change will not significantly reverse the long-term decline in birth numbers, emphasizing structural demographic trends rather than immediate policy effects.

Main Views

• Birth Rate Decline Continues: The number of births per marriage is expected to decline, with the number of new mothers shrinking by ~35% over the next 15 years.
• Policy Change Not Enough: The end of the one-child policy is unlikely to spark a baby boom. Birth rates per marriage have remained stable despite the policy change, and the number of births per marriage would need to increase by 50% (from 1.25 in 2014 to 1.89 by 2030) to maintain annual birth numbers at the previous five-year average of 16 million.
• Marriage Boom is Temporary: The recent stabilization in birth numbers is attributed to a temporary marriage boom by the 1980s generation. As this wave recedes, the number of births will likely continue to decline.
• Demographic Headwinds: The shrinking population of young consumers (15-35 years old) will create challenges for consumer categories that rely heavily on this demographic.
• Millennials as a Growth Driver: Despite the shrinking youth population, Millennials (born in the 1990s) are more educated and have higher earning potential, which could create growth opportunities in underpenetrated consumer categories.

Key Information

Birth Trends in China

• Annual births averaged 16.3 million from 2010-2014, a 26% drop from 1990-1994.
• Births per marriage declined from 2.0 a decade ago to 1.25 in 2014.
• The number of births per marriage is expected to rise to 1.89 by 2030 to maintain flat birth numbers.

Policy Impact

• The two-child policy was introduced to counteract the declining birth rate, but the response has been tepid.
• As of May 2015, only 1.4 million applications were filed for the second child, far below the estimated 11 million eligible couples.

Consumer Retail Outlook

• Highly Penetrated Categories: These (e.g., instant noodles) will face volume growth headwinds due to fewer new mothers.
• Underpenetrated Categories: These may see growth as Millennials enter their prime consumption years.

Key Stock Analysis

Company	Ticker	Rating	Price Target (LC)	Price (LC)
Hengan International	1044.HK	Buy*	102.00	83.95
Mengniu Dairy	2319.HK	Sell	13.30	15.06
Anta Sports Products	2020.HK	Buy	22.90	21.75

Key Insights on Stocks:

• Hengan International: Expected to benefit from premium brand positioning and online sales growth in the diaper segment. However, we expect gradual sales growth (0–4%) in 2015–2017.
• Mengniu Dairy: Faces challenges in upgrading products and shifting sales channels. We maintain a Sell rating due to market share losses and operational burdens.
• Anta Sports Products: Well-positioned to benefit from rising sports participation, functional products, and branded offerings. Expected to deliver 16% topline CAGR for 2015–2017.

Investment Context

• Rating Distribution: 32% Buy, 53% Hold, 15% Sell.
• Investment Banking Relationships: 63% of stocks have investment banking relationships, 57% are neutral, and 52% are in Sell category.
• Quantum and GS SUSTAIN: Goldman Sachs uses its proprietary database (Quantum) and a global investment strategy (GS SUSTAIN) to identify leaders with sustained competitive advantage and superior returns on capital.

Regulatory and Disclosure Notes

• The report includes detailed disclosures about potential conflicts of interest, compensation structures, and regulatory compliance in various jurisdictions (e.g., US, Australia, Brazil, Canada, Hong Kong, India, Japan, Korea, New Zealand, Russia, Singapore, Taiwan, UK, EU).
• Analysts involved in the report are certified and have no direct financial incentives tied to the report's recommendations.
• The report is intended for "wholesale clients" in jurisdictions like Australia, New Zealand, and Singapore, and may not be suitable for retail investors.

Conclusion

While the end of the one-child policy may offer some opportunities for consumer retail, particularly in underpenetrated categories driven by Millennials, it is unlikely to reverse the long-term demographic decline. The key challenge remains the shrinking number of new mothers, which will continue to pressure mature consumer categories. The report highlights the importance of other factors, such as income growth, shifting consumer preferences, and competitive dynamics, in driving retail sector performance.