Chinese consumers are spending. UBS picks the stocks to cash in

Published Mon, May 31 20217:30 PM EDTUpdated Tue, Jun 1 20211:19 AM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

China's young people and older consumers present a raft of new opportunities for investors —especially in the tech and health care sectors, according to analysts at UBS . The investment firm picked a number of stocks that tap into the current and future needs of both "Millennials/Generation Z" (those born between the early 1980s and late 2000s) and the "Silver Economy" (people over the age of 64). In fact, UBS said the over-65s have "unprecedented wealth," in a research note published last month. Meanwhile, well-educated younger people have more money than their peers in other countries and are behind a boost in spending on tech platforms, the analysts said. Here are a dozen of the bank's stock picks: Young and wealthy UBS's list of "young consumer plays" include kitchen and bathroom manufacturer Oppein Home Group and household appliance maker JS Global Lifestyle . In technology, UBS's picks are internet giant Tencent , short video app ( and TikTok rival ) Kuaishou Technology and e-commerce platform Meituan . In the food and drink sector, snacking company Chacha Food is a pick, as is Tsingtao Brewery . UBS' stock picks follow the results of China's seventh census , which revealed an increase in the percentage of the population aged over 60, while UBS said that the younger generation now has "significant" spending power as they inherit wealth. China's one-child policy — which was relaxed on Monday to allow parents to have three children — means that a young person tends to be the only child in a family, and "generational wealth transfers" increases their spending power, UBS analysts said. The group is made up of Millennials and Generation Z, born between the early 1980s and late 2000s and UBS expects the age group to be the "biggest buyers" of consumer durables over the next 10 years. "This group is wealthier and is spending more on self-indulgence. Compared with their parents, they have stronger social and spiritual needs and are more focused on innovation and quality," UBS's analysts wrote. "Young consumers grew up with the popularisation of the internet and digital technology. They are China's true netizens and are better educated than their predecessors. We believe Generation Z will continue to drive spending on online/mobile platforms alongside rapid development of cultural industries," the analysts added. The older generation When it comes to older consumers, UBS's "silver economy plays" include: Sino Biopharmaceutical – maker of China's Sinopharm Covid-19 vaccine . Pharma development companies WuXi Biologics and Pharmaron . Hospital group Aier Eye Hospital and diagnostics firm Amoy Diagnostics. "As China's baby boomers reach retirement age, their unprecedented wealth (to the generation immediately before and after) may open up new business opportunities," the analysts said. UBS expects new prospects for firms as the Chinese population ages. "Many of the much needed services are under supplied currently, pointing to good opportunities for new businesses to emerge and grow," the analysts wrote.

Joggers in Shanghai, China, on April 10, 2021.

Qilai Shen | Bloomberg | Getty Images

China's young people and older consumers present a raft of new opportunities for investors —especially in the tech and health care sectors, according to analysts at UBS.

The investment firm picked a number of stocks that tap into the current and future needs of both "Millennials/Generation Z" (those born between the early 1980s and late 2000s) and the "Silver Economy" (people over the age of 64).

In fact, UBS said the over-65s have "unprecedented wealth," in a research note published last month. Meanwhile, well-educated younger people have more money than their peers in other countries and are behind a boost in spending on tech platforms, the analysts said.

Here are a dozen of the bank's stock picks: