China Consumer: Attractively Valued & Less-Crowded Stocks with Good Liquidity & High Cash Return

Citi Research identifies three attractively valued and less-crowded China consumer stocks with good liquidity and high cash return, all rated Buy: YUMC (YUMC.N/9987.HK) in China's restaurant sector, Midea (300.HK/000333.SZ) in home appliances, and Moutai (600519.SS) in baijiu. For YUMC, we expect 3Q26 group SSS to decline 1% (KFC -1%, PH -0.5%), above the market's most bearish -2%; including ~6% Rmb appreciation vs US$, group sales should rise ~10% YoY, restaurant profit +13%, OP +14% and NP +12%, with sequentially improved SSS in 4Q26. Midea's 3Q26 air-con pressure (amplified by its DTC pivot) looks well priced in;