Wanlian Securities: Three factors drive the growth of the health products industry, and the prospects for the young consumer market are promising.

Wanlian Securities released a research report stating that on the supply side, the health products category is gradually becoming more refined, with more diverse consumption scenarios, attracting a younger generation of consumers. In the segmented market, the dietary nutrition supplementation field is dominant, with promising prospects for sports nutrition and children's health consumption, while traditional tonics and weight management face downward challenges. With improved regulations and effective driving forces of channels, demand, and supply, it is expected that China's health products industry will continue to maintain a growth trend in the medium to long term. The report judges that segmented markets related to young consumers and high efficiency, such as sports nutrition, children's health, workplace recovery, and anti-aging, are the fastest growing tracks, and recommends focusing on leading health product enterprises with strong presence in these high-growth areas for active layout in channels, research and development, and brand strength. Key points from Wanlian Securities: Driving factors: Three major factors driving industry growth Industry growth driving factors include: On the channel end, the shift of health product channels from offline to online brings more precise marketing methods that can effectively stimulate consumer demand; On the demand end, residents have experienced the COVID-19 infection in recent years, coupled with the aging trend intensifying, and health awareness is expected to continue to strengthen; On the supply end, the health products category is gradually becoming more refined, with more diverse consumption scenarios, attracting a younger generation of consumers. Overall, China's health products market still has considerable room for growth compared to mature markets. With improved regulations and effective driving forces from channels, demand, and supply, it is expected that China's health products industry will continue to maintain a growth trend in the medium to long term. Segmented markets: Dietary nutrition supplements are mainstream, with sports nutrition growing rapidly Dietary nutrition supplement market: The main consumer area for health products, accounting for 55.98% of the industry's market size in 2024. The market concentration has decreased, with a relatively dispersed overall structure where CR5 is 27.6%. In the long term, as regulations tighten and competition intensifies, the advantages of leading companies will become more apparent. Traditional tonics market: The second largest market for health products, which was once stagnant due to the "Quanjian Incident." Due to the special effects of Chinese herbal medicine and widespread asymmetry in product information, the volume and price of products face downward challenges. Sports nutrition market: Although small in size, it has the fastest growth rate, with a compound annual growth rate of 8.64% from 2010 to 2024. The industry has a relatively high concentration, with Xiwang Foodstuffs holding nearly a fifth of the market share. With the popularity of exercise and fitness concepts, the industry has ample growth potential in terms of volume and price. Children's health consumption: Despite declining birth rates, the focus on children's health is driving industry growth, with a compound annual growth rate of 8.37% from 2010 to 2024. The growth rate slowed after the epidemic, but is expected to rebound later. The market competition structure is relatively dispersed, and market concentration stabilized after the epidemic, with major leading companies having relatively balanced market share. Weight management market: The growth rate fluctuates significantly, with the market size declining year-on-year in 2022 due to increased health awareness and the introduction of weight loss drugs squeezing market space. Emerging brands are emerging one after another, impacting the existing market structure. From the perspective of consumer groups and penetration rates, market growth is still promising. Risk factors: 1. Industry policy risks; 2. Product quality and food safety risks; 3. Economic, political, and social conditions risks.