25 August 2020Equity Research Asia Pacific | ChinaChina Market StrategyCapitalise on 245 mn retiring baby boomersThematic Research | StrategyConnections SeriesFigure 1: Key milestones for baby boomers and spending preferences after retiringSource: Credit Suisse,CQi survey; CQi is a product of Credit Suisse APAC Equities and not part of Credit Suisse Equity Research.Focus on the baby boomer generation. While population ageing is well understood globally, the pace at which it is going to unfold in China is probably not as well understood by the market. Different from the “baby boomers” in the West, we refer to Chinas baby boomers as people born in the 1960s when 245 mn Chinese were born, more than in any other decade in its history and equal to 8% of the global population in 1960. Our China Quantitative Insights (CQi) study, published today, leverages on a comprehensive survey of 1,500 middle-aged and elderly consumers and focuses on this generation. In this report, our team of analysts from China as well as from relevant sectors around the world, including other markets in Asia, take this CQi study into consideration and discuss the most important issues related to this theme for their respective sectors and identify key investment themes.Baby boomers are wealthier, more confident, willing to spend and pay for quality. They are more likely to travel overseas within the ASEAN region as the most visited destination, both for leisure as well as medical tourism. Baby boomers spend more time on on-line social, video/music, newsfeed and shopping activities, with preference for quality and necessity over price (so preference for Taobao/JD over PDD). They also expect to exercise more with higher brand awareness for Li Ning and Nike. Their higher hospital spend and willingness to pay for healthcare services should benefit high-end integrated private hospitals. As part of the public hospital infrastructure, orders for large-scale medical equipment (MRI equipment, CT scanners, ventilators, dialysis machines) would also increase. CQis survey also found that baby boomers are more accepting of moving into senior centres, thus facilitating investments in retirement communities.and much more. The impact would also be felt on pension deficits, calling for transfer of shares from state-owned funds, development of commercial pension and a more efficient asset allocation. Increasing participation of insurance companies and pension funds will build an institutional investor base and introduce sophisticated investment strategies and styles.How to position. Tongcheng-Elong, AOT, Malaysia Airports, BDMS, IHH, Alibaba, JD, CR Medical, New Frontier Health, Siemens Healthineers, Ping An, China Life, AIA, Prudential, Trip.com, Li Ning, Philips, Fresenius Medical Care and Vanke are major beneficiaries.The Credit Suisse Connections Series leverages our exceptional breadth of macro and micro research to deliver incisive cross-sector and cross-border thematic insights for our clients.Research AnalystsEdmond Huang852 2101 6701edmond.huangcredit-suisse.comContributing AnalystsCharles Zhou, CFA charles.zhoucredit-suisse.com Tina Longtina.longcredit-suisse.comIvy Jiivy.jicredit-suisse.com Jianping Chen jianping.chencredit-suisse.comJason Liujason.j.liucredit-suisse.com Jesalyn Wong jesalyn.wongcredit-suisse.comJoanna Cheah, CFA joanna.cheahcredit-suisse.com Thaniya Kevaleethaniya.kevaleecredit-suisse.comAmanda Foo amanda.foocredit-suisse.com Jerry Sujerry.sucredit-suisse.comHarvie Chou harvie.choucredit-suisse.com Richard Kersleyrichard.kersleycredit-suisse.comMax Yates max.yatescredit-suisse.com Christoph Gretlerchristoph.gretlercredit-suisse.comAbid Hussain, FIA abid.hussaincredit-suisse.com Wenting Yuwenting.yucredit-suisse.comDaniel Cuidaniel.cuicredit-suisse.comDISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.25 August 2020Focus chartsFigure 2: Population aged 65+ vs healthcare expenditureFigure 3: Average insurance density (premium/capita) vs GDP/capitaSource: UN, World Bank, Credit SuisseSource: World Bank, SwissRe, Credit SuisseChina Market Strategy94Figure 4: Sportswear retail sales as a % of total apparel and footwear sales in 2018Figure 5: Number of internet users and penetration of those aged over 50 years old18050+ internet users (mn)18%160 50+ internet penetration %14012010080604