(Yicai) June 12 -- Chinese concept stocks linked to new consumption trends are driving this year’s rally in Hong Kong, fueled by brands popular among women and a rise in emotional consumption, according to Raymond Ma, chief investment officer for the Chinese mainland and Hong Kong at Invesco.

The Hang Seng Index, Hong Kong’s primary stock market benchmark, has gained more than 20 percent since the start of the year. Standout performers include gold jeweler Laopu Gold [HK: 6181], whose shares have more than tripled; toy maker Pop Mart International Group [HK: 9992], which has surged nearly threefold; and premium cosmetics brand Mao Geping Cosmetics [HK: 1318], which has doubled in value.

This surge is largely powered by women's emotional consumption, Ma from the American investment company explained in a recent interview with Yicai. The legacy of China’s one-child policy, combined with the solitary nature of digital consumption, is reinforcing a shift toward purchases made for emotional rather than practical reasons. This trend is also accelerating the global expansion of Chinese intellectual property, he added.

The global trend of women's rising earning power is reflected in lifestyle upgrades. Research by Boston Consulting Group shows that women are typically willing to pay a premium for quality -- American women, for instance, are willing to spend 15 percent more on high-quality clothing.

Looking ahead to the second half of this year, analysts expect the consumer sector to remain a strong performer. But identifying the right stocks is challenging, especially amid increasingly stretched valuations. To navigate this, Ma recommends traditional valuation tools such as the PEG ratio -- the price-to-earnings ratio divided by projected earnings per share growth -- commonly used to evaluate growth stocks.

However, he also urges analysts to consider “soft indicators” like emotional value, user stickiness, and brand IP vitality. He suggests incorporating metrics such as a sentiment index or the proportion of female users to better anticipate stocks that may command valuation premiums.

China's evolving consumption trends are also drawing interest from international investors. While foreign capital remains a relatively small portion of long-term investment in Chinese equities, Yicai’s research indicates growing enthusiasm for creative companies and intelligent manufacturers with high gross profit margins.

Editor: Emmi Laine