1、Disclosures Indias population should grow bigger than China, while Chinas is set to shrink Meanwhile, Asians are living longer, residing in smaller households, flocking to mid-tier cities, and saving more We identify some big picture implications: empty-nesters trading up, a female future, and risin

2、g spending on health We build on our previous research on Asias demographics with a new series. This report focuses on long-term investment themes shaped by demographics, while in the accompanying notes we work with fundamental analysts to highlight stock opportunities, starting with the consumer se

3、ctor: Asia Demographics Tectonic shifts ahead for the consumer sector, 4 August 2020. Big changes are not only around the corner. Before the end of this decade, India is expected to surpass China as the worlds most populous country, which should swiftly be followed by Chinas population declining. Ma

4、rkets will start to consider the implications well before this happens. For instance, companies need to position themselves for slower volume growth, and instead work on their ability to raise prices possibly by offering better quality products. they are also happening now: Asians are getting older,

5、 living longer, and flocking to mid-tier cities. Theyre also residing in smaller households while women are having fewer children and working more. All this impacts consumer spending. While COVID- 19 continues to cast a shadow over the regions economy, it is also accelerating some long-term trends t

6、hat were already underway like more online shopping. An academic view: We also interviewed Dr. Stuart Gietel-Basten, Professor of Social Science and Public Policy at HKUST. He stated that it is possible for very low fertility rates to become more common in the region. Further, he suggested that it w

7、ould be prudent to start planning for a time when families in Asia are not able or willing to care for their older members, and to start thinking about new types of insurance, care, and financial products to deal with this. Opportunities: (1) We expect Chinese empty-nesters to buy more premium produ

8、cts better quality at higher prices on almost everything from food and clothing to home furnishings. (2) More women in the workforce, which contributes to higher household income and how it is spent. (3) New forms of urbanisation are unfolding too with growth higher in mid-tier cities, especially in

9、 ASEAN and India. (4) Increased health awareness and rising risks from some diseases, particularly diabetes, mean more business for pharmaceutical companies, hospitals, and sellers of health equipment. (5) Asians are living and working longer, which allows for a greater accumulation of wealth to fin

10、ance an extended period of retirement. 4 August 2020 Herald van der Linde*, CFA Head of Equity Strategy, Asia Pacific The Hongkong and Shanghai Banking Corporation Limited .hk +852 2996 6575 Barak Hurvitz* Associate, Equity Strategy The Hongkong and Shanghai Banking Corporation Limited .hk +852 2996

11、 6941 Prerna Garg* Associate Bangalore * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations. Asia Demographics Equity Strategy Asia Large shifts are coming soon Equity Strategy Asia 4 August 2020 2 Asia demographic snapshot 3 F

12、acts and figures 4 The big picture 5 Executive summary 6 Investment themes 9 Empty-nesters and trading up 10 The future is female 13 Rising mid-tier cities 16 Health and wellness 20 Asset accumulation 27 Demographic trends 31 Urbanisation 32 Education 36 Ageing 39 More elderly workers 42 Women work

13、46 Fewer children, smaller households 49 Chinese empty-nesters 54 Disclosure appendix 57 Disclaimer 59 Contents 3 Equity Strategy Asia 4 August 2020 Asia demographic snapshot Source: McKinsey Global Institute Cityscape database, PISA 2018 Database, PISA at the OECD, Ministry of Education and Trainin

14、g (Vietnam), UN Household Size and Composition Around the World 2017, World Urbanization Prospectus 2018, United Nations, HSBC PISA is the OECDs Programme for International Student Assessment. Education Mainland Chinese students score well in reading tests, as do those in Singapore and Hong Kong wit

15、h Vietnams score on a similar level with the US (mean PISA score) Smaller households and Chinas empty-nesters Fertility rates are falling, as are the number of marriages lowering the average size of households and impacting saving and spending across Asia (single-person households, as a % total) 18%

16、 Demographic shifts driving these investment themes Asset accumulation is a growth industry across the region More women in Asia are working and increasing household income Diabetes is a theme c42% of diabetics in the world are in India or China There is more growth in mid-tier cities across Asia th

17、an in mega cities The Chinese empty-nester the biggest demographic change globally of urban population lives in Asias mid-tier cities (2020) Number of mid-tier cities (population of 1-5m) in Asia will increase by 233% (19902030) Asians continue to flock to urban centres Urbanisation has a significan

18、t impact on how people live, if they get married, what education they receive, and if they can find a job. Smaller urban cities will grow faster than the regions larger cities Compound annual growth rate of GDP (201330) in ASEAN Town / rural 5m Total ASEAN Mainland China SingaporeHong Kong KoreaViet

19、namUS 555 549 524 514 505505 Mainland China Taiwan Japan Hong KongKorea India35% 32% 27%18% 15% 4% 2.8% 6.5% 6.1% 5.4% 5.2% 4.8% 99 1990 269 2020 330 2030 Equity Strategy Asia 4 August 2020 4 Facts and figures 2024 When the population of India is expected to exceed China 50% of luxury purchases to b

20、e done at home in China by 2025e USD108trn size of pension assets in Asia (ex-Japan) by 2050e 1.16bn visits to traditional Chinese medicine hospitals in 2019 330 Mid-tier cities in Asia by 2030e, up from 99 in 1990 42% of diabetic patients in the world come from China and India 33% Proportion of sin

21、gle-person households in Korea by 2030e 100m Number of women who found a job in Asia between 2000 and 2017 Japan is already “super-aged” with Singapore, Hong Kong, Taiwan, and Korea on course to join it by 2030 32% of Koreans aged over 65 are still employed Top of the class Vietnam achieves the same

22、 scores as US students in international PISA exams Source: HSBC 5 Equity Strategy Asia 4 August 2020 1. Tectonic shifts between Asias two biggest countries: Before the close of this decade, Indias population is expected to exceed Chinas, while Chinas population will start shrinking. That means compa

23、nies cant just rely on volume growth anymore. See page 32. 2. Look at Japan. Falling population growth does not necessarily mean the labour force will shrink. Even though Japans population is falling, the labour force has been growing since 2013. And as people work longer, they accumulate more wealt

24、h. See page 45. 3. Rise of the Chinese empty-nesters. The combination of an ageing population, children leaving home, and rising numbers of working women, is a powerful force in China. These empty-nesters are one of the largest demographic shifts unfolding in the world. They buy high-quality goods a

25、nd are willing to pay higher prices. See page 10. 4. Focus on shrinking household sizes. The number of single-person households is estimated to rise to 32.7% by 2030e in Korea. This changes spending patterns more discretionary consumption and ready-to-eat meals leading to rapid growth in convenience

26、 stores. Expect similar trends in Taiwan and parts of mainland China. See page 14. 5. Women to the fore. More women in Asia are working, especially in China and Indonesia where more are completing higher education and getting managerial jobs. This boosts household income and impacts how families spe

27、nd their income. See page 13. 6. Dont miss mid-tier cities. Theres growing employment and spending in mid-tier cities, especially in India and ASEAN. This has created a new group of consumers in lesser- known cities and towns across Asia. For investors, assessing a companys geographical footprint be

28、comes increasingly important. See page 16. 7. As people shift online. Southeast Asias internet economy is expected to triple to USD300bn by FY25e. Companies are now beginning to reorient their businesses as more customers order online for the first time. ASEAN and India in particular should see rapi

29、d increases in online penetration. COVID-19 will only accelerate this trend. See page 17. 8. Traditional medicine is gaining traction. Rising interest in health is renewing interest in traditional products. Exports of traditional Chinese medicine rose 270% over the past 10 years. Indonesia and India

30、s traditional healthcare industries are booming too. See page 25. 9. Bicycles are fashionable, again. With people choosing healthier lifestyle and keen to avoid public transport due to COVID-19, demand for bicycles is rising. Asia has some of the best bicycle designers and bicycle component makers,

31、especially in Taiwan. See page 24. 10. Diabetes is a key healthcare threat. While the focus is currently on COVID-19, more than 70% of the worlds population succumbs to non-communicable diseases like cancer and diabetes. Associated risks are high in the Philippines, Indonesia, and India. Healthcare

32、and consumer companies need to develop products to deal with these diseases. See page 24. 11. Asset accumulation is significant in Asia. Asians work longer and accumulate more assets. We expect Asias asset management industry, on average, to grow 5% until 2050e. Asset management in Asia is a growth

33、industry. See page 27. The big picture Equity Strategy Asia 4 August 2020 6 Why demographics matter for portfolio construction This is the first in a series of reports where we update our previous work on demographics. If youre looking for investment ideas for the next month or so, this report will

34、not help you. But it will help you if you want to start thinking about how to prepare for some of the major demographic shifts that lie ahead. If you want to understand what makes Asia tick and the long-term drivers that will dominate the region for the first half of this century this report will be

35、 key. We also highlight long-term investment themes that will benefit from all this. We have been repeatedly told that Asian demographics look terrible or that a demographic time bomb is ticking given low fertility rates1 and an ageing population. However, we believe thats the wrong way to look at i

36、t. Demographics are similar to the weather there is little you can do to stop it and there is no good or bad weather. A farmer will love the rain, a sunbather wont. You can complain about it, but rain will fall. Instead, its all about being prepared and having an umbrella at hand, or sunscreen if it

37、 shines. Or, in investment terms, highlight trends and prepare for them. We have done extensive research on demographics in the past (see Asia Demographics: And how to make money from it, 23 April 2019) and this report builds on that analysis. While demographics dont really change much, COVID-19 has

38、 accelerated some of the long-term themes with some themes becoming a lot more visible. This includes more domestic travel, mid- tier cities emerging, and rising demand for digitalisation. Clearly, this matters for businesses and investment managers looking for new opportunities. However, this repor

39、t is different, as mentioned above, it is not about highlighting stocks for the next quarter, but more about diving into themes that will dominate Asian-focused portfolios for decades to come and how they vary across countries. This report is divided into two sections: in the first part we look at f

40、ive investment themes unfolding in Asia and in the second, we recap what the major demographic changes are. _ 1 Fertility rate measures the average number of children per woman. The birth rate measures the number of children per population. Executive summary Asias demographics arent bad, just comple

41、x; people are living and working longer, especially women, and education is changing Demographics are especially important for portfolio construction as they drive key investment themes like a rise in empty-nesters, a female future, growth in mid-tier cities, acceleration in asset accumulation, and

42、increased spending on health and wellness. In this report, we focus on long-term investment themes shaped by demographics building on our previous research and also looking at whats new or changed 7 Equity Strategy Asia 4 August 2020 Five investment themes We delve into investment themes that we bel

43、ieve will benefit from these demographic shifts. We group these trends into five investment themes: Empty-nesters trading up. They spend more on travel and are willing to pay for quality products. Premiumisation and companies moving up the value-added ladder can benefit. More women working means ris

44、ing household incomes and demand for quality products. Working women have more say in what they buy for themselves and for the family. As people flock to medium-sized cities, more so than mega cities, thats where companies should look for growth. We believe this is especially true in India and Indon

45、esia. Rising incomes are increasingly being spent on health and wellness, with COVID-19 accelerating this process. Part of this is likely to flow through to traditional medicine, which continues to be appealing in parts of Asia such as China, India, and Indonesia. Working longer means more asset acc

46、umulation, which needs to be invested, and, as such, we continue to see rising growth in the Asian asset management industry. Five demographics shifts Our investment themes are based on underlying demographic shifts reshaping Asia. Many of these themes are slow burners and some are hard to see, but

47、they are undoubtedly playing out: Theres a rise in the number of households where grown-up children have left and parents find themselves in a comfortable financial position. These empty-nesters are the largest, fastest-growing consumer market globally. The number of Chinese households earning more

48、than USD50,000 per year is expected to be over 64m by 2030e, growing at a CAGR of 15.5% since 2010. More women are working, marrying late, and having fewer children. Hence, households are getting smaller, which changes the way they consume. A single-person household spends more on ready-made meals a

49、nd outside entertainment than a four-person family. Asians continue to move from villages to cities and this means growth in urban centres; however, it is mid-tier cities that are growing faster than mega cities, especially in ASEAN. Asians are ageing. 15% of the Asian population to celebrate their 40th birthday in the next 10 years, post which the expenditure of health gen