As the Hong Kong stock market earnings season unfolds, one word aptly describes the situation: turbulent. Positive news does exist—from the popularity of Tencent's小龙虾 to recent official media comments on food delivery competition. However, favorable developments in Hong Kong stocks often fail to sustain momentum, with their impact lasting only a day. The earnings season has brought more shocks than surprises, leading to sharp stock price reactions. From Tencent and Alibaba to yesterday's Pop Mart and today's Kuaishou, no company has been immune.

Last year's bull market in Hong Kong was built on the successive rises of three sectors: internet, new consumption, and innovative pharmaceuticals. However, the long-awaited rally eventually succumbed to overwhelming selling pressure. Companies conducting IPOs or secondary listings, regardless of their global expansion capabilities, have drained Hong Kong's already weak liquidity. Combined with geopolitical tensions, even substantial external support has struggled to stabilize the market. As a result, applications of AI have stalled, innovation in pharmaceuticals has slowed, and youth-driven consumption has declined. The vibrant, competitive atmosphere that once characterized the market is now a distant memory.

The new consumption sector has been particularly hard-hit. Data as of 11:30 a.m. today show significant declines for several prominent companies: Maogeping with a maximum drawdown of 45.10%, Laopu Gold at 50.47%, Mixue Group at 51.46%, and Pop Mart with the steepest decline of 55.80%. For context, despite the downturn in baijiu stocks, Kweichow Moutai's maximum drawdown since last year is 17%, Wuliangye's is 26.6%, and Luzhou Laojiao's is 30%. This implies that investors who bought into Hong Kong's new consumption sector at its peak last year, rather than positioning ahead of the trend, may have incurred losses comparable to or even greater than those seen in traditional liquor stocks.

Amid discussions about the bursting of the blind box bubble, it is worth recalling Pop Mart's remarkable journey. Starting from the lows of the Hong Kong market in 2022, its stock price surged over 30 times at its peak, capturing the attention of Gen Z consumers. LABUBU, one of its popular IPs, was widely embraced by young people, seemingly perfectly timed. Yet, just nine months later, the once-promising global consumer brand has become a trap for investors who bought at high valuations. Despite this, Pop Mart's valuation has shifted from 60 times earnings last year to 20 times this year, suggesting potential value.

While Pop Mart shareholders have long argued that its business model differs from that of Sanrio or Disney, it is instructive to examine Sanrio's stock performance, which has also experienced multiple steep declines, with a recent drawdown of around 40%. Regardless of business model distinctions, stock volatility remains inevitable, especially in the Hong Kong market. Over the past six months of Pop Mart's sharp price fluctuations, the question arises: which fund managers successfully navigated this downturn?

Using screening tools, two notable examples emerge: Wang Wanyi's Fullgoal Hong Kong Stock Connect Strategy Select and Wu Yuanyi's GF Value Core. Wang Wanyi delivered strong performance last year, with her Fullgoal Dividend Select QDII fund achieving a 40% return in 2025. Her Hong Kong Stock Connect Strategy Select fund began investing in Pop Mart in 2024, increased its position to the maximum in the first half of 2025, and exited in the third quarter. After reducing exposure to Hong Kong's new consumption sector, Wang shifted allocations to commodities and insurance, helping the fund maintain a positive year-to-date return.

Similarly, Wu Yuanyi, a fund manager who gained prominence last year, demonstrated a keen eye for growth opportunities. Unlike many growth-focused managers who heavily invested in tech and computing, Wu capitalized on several major trends with precise timing. In the first half of last year, as Hong Kong stocks entered a bull market ahead of A-shares, Wu seized opportunities in Pop Mart and Laopu Gold. He sold both positions in the third quarter as A-share tech stocks began to rally, then increased holdings in domestic computing and storage-related equities, enabling his fund to benefit from successive growth waves. His fund posted exceptional returns last year and remains positive year-to-date.

In addition, Li Yaozhu's GF Shanghai-Hong Kong-Shenzhen New Opportunities also fully exited Hong Kong's new consumption sector in the third quarter of last year. While Li is better known for managing GF Global Select QDII, his performance in Hong Kong stocks has also been commendable. These managers captured the most profitable phase of Pop Mart's rally and avoided the subsequent decline, resulting in relatively controlled fund volatility over the past six months.

Investors should note that all investments carry risks, and caution is advised. The information provided is for reference only and does not constitute investment advice. Prospective investors should review fund documents and risk disclosures carefully before making decisions.