The 3,600 yuan childcare subsidy detonates the maternal and child consumption chain: who is leading the ups and downs on core tracks such as milk powder, childcare, and assisted reproduction?

The national childcare subsidy policy was introduced, and maternal and child concept stocks ushered in explosive growth.

On July 28, the “Childcare Allowance System Implementation Plan” recently issued by the General Office of the CPC Central Committee and the General Office of the State Council clearly states that from January 1, 2025, allowances will be paid to infants and children under the age of 3 who have given birth in accordance with laws and regulations until they reach the age of 3. Childcare allowances are paid on an annual basis. At this stage, the basic national standard is 3,600 yuan per child per year. This major positive news immediately sparked strong reactions in the capital market.

On July 29, after the opening of Hong Kong stocks and A shares, mother and child concept stocks exploded collectively, forming a bright “red landscape”. Among them, individual stocks such as A-shares Beinbeauty (002570.SZ) and Baby-Friendly Room (603214.SH) rose strongly, while Kids' King (301078.SZ) and Knight Dairy (832786.BJ) rose more than 10%. Most Hong Kong infant concept stocks also opened higher. Jinxin Fertility (01951) rose 8.93%; H&H International Holdings (01112) rose 7.33%; China Feihe (06186) rose 5.12%; and Santa Bella (02508) rose 3.13% to HK$7.9. Simply put, the mother and child sector became the brightest star sector in the market today.

It is worth noting that this is the third consecutive trading day for A-share maternal and child concept stocks to rise. Policy expectations have already been reflected in the market, but even after the official document was issued, it still brought more enthusiasm than expected.

In terms of capital flow, the net inflow of the main capital into the maternal and child sector on the same day was over 2.5 billion yuan, of which Beinbeauty received a net inflow of 420 million yuan and baby-friendly rooms received a net inflow of 380 million yuan, showing that institutional investors are strongly optimistic about the industry's prospects. Market trading volume has also increased significantly. The trading volume of many individual stocks has more than tripled compared to normal, and trading activity has increased markedly.

The Zhitong Finance App believes that the introduction of the “Childcare Allowance System Implementation Plan” is the implementation of childcare support to economic boosting. It has not only brought a strong impetus to the maternal and child industry, but will also leverage the huge blue ocean market for the entire “childcare” industry chain. Judging from the reaction of the capital market, this round of the market not only has policy catalytic factors, but also reflects the market's recognition of the industry's long-term development space. This article will thoroughly analyze the impact of policies on various segments and sort out the core beneficiary targets.

From encouraging childbearing to substantial support, the 10 trillion blue ocean market is opening up

The introduction of the “Childcare Allowance System Implementation Plan” is not an accident; it is an important part of our country's response to changes in population structure and improving the maternity support policy system. The core content of the plan can be summarized as “three clarifications”: make it clear that the target of the subsidy is for infants and children under the age of 3; clarify that the subsidy method is paid on an annual basis; and clarify that the basic national standard is 3,600 yuan per child per year. This standard is equivalent to 300 yuan per month.

What is more noteworthy is that the expression “basic national standard at this stage” in the plan leaves policy space for the dynamic adjustment of subsidy standards in the future. Industry insiders generally expect that subsidy standards are expected to gradually increase as the economy develops and financial affordability increases. At the same time, local governments are also encouraged to raise subsidy standards appropriately according to the actual situation, which means that some economically developed regions may experience higher subsidy levels.

With favorable policies, market institutions have raised their expectations for the development of the maternal and child industry.

According to the latest research report by Guorong Securities, China's infant market has entered a golden period of “sharp rise in quantity and quality”. The market size is expected to reach 4.2 trillion yuan in 2024, break the 5 trillion yuan mark in 2025, and hit 10 trillion yuan in 2030. This means that the compound growth rate of the industry will remain above 15% in the next five years, far higher than the GDP growth rate over the same period.

Looking at segments, CITIC Securities's analysis indicates that the four major directions of dairy products, maternal and child chains, infant products, and post-natal care services have benefited the most. Among them, infant formula is expected to grow from the current 200 billion yuan to 300 billion yuan in 2025; the maternal and child retail chain is expected to maintain a growth rate of more than 20%; the infant products market will continue to expand as consumption is upgraded; and post-natal care services are expected to become the fastest growing segment, with an annual growth rate of more than 30%.

Infant formula: the most resilient “policy base” in terms of volume and price, highlights the entry value of maternal and child retail traffic

The infant formula industry is undoubtedly the most definitive beneficiary area under the childcare subsidy policy. Milk powder accounts for more than 30% of childcare costs. The track has remarkable characteristics of immediate demand, high frequency, and high passenger unit prices, and the rigid demand released by subsidies will directly translate into market growth.

The policy encourages childbearing, and the number of newborns is expected to rise steadily. Combined with the trend of consumption upgrades, the share of high-end milk powder will increase.

Domestic milk powder brands have further replaced foreign brands with policy support, and their market share continues to expand.

In the context of the rapid expansion of the infant dairy products market, core beneficiaries include Beinbeauty (002570), China Feihe (06186), and H&H International Holdings (01112). For example, China Feihe is a leader in the infant formula industry in China, and has maintained the highest market share for a long time (about 18-20%). The company is positioned in the high-end milk powder market. The ultra-high-end series includes Xingfeifan, Zhenzhi Organic, and Zhuo Rui, while the high-end series includes Feifan, Jingcui Plus, etc., which are expected to meet the demand for consumer upgrades. The company's high-end product lines (such as Starfly) are expected to benefit from the fertility policy, and the channel decline strategy is highly consistent with the people covered by the subsidy policy. With the dual logic of “high-end plus immediate demand” strengthened, China Feihe may be able to turn policy dividends into performance.

(Revenue of infant formula business in the past three years)

Furthermore, after the childcare allowance was distributed, the family's maternal and child consumption budget increased, and offline mother and child stores were the core channel, and the traffic entry value was highlighted. Passenger traffic and customer unit prices are expected to both increase, and direct subsidies will be converted into consumption. Leading chain brands use supply chain advantages, membership systems and value-added services (such as childcare consultation, early education, etc.) to further strengthen their market position. In the long run, industry consolidation is accelerating, and regional leaders are expanding their market share through mergers and acquisitions.

As the largest maternal and child chain in the country, Kids King (301078.SZ) has built a “product+service+social” ecosystem. The country has 1,046 stores covering 200 cities and serving 94 million members. 2025Q1, the company's net profit is expected to skyrocket 150%-230%. In addition, the company launched KidsGPT, an AI model for mother and child contractions. The repurchase rate for black gold members is over 90%, and the production value of a single customer is 10 times that of ordinary members.

The East China Regional Leading Baby Friendly Room (603214.SH) has achieved remarkable results through refined operation, with more than 600 direct-run stores covering all categories of 0-6 year olds. Its profit code is that the gross margin of its own brand exceeds 45%, and refined operation reduces costs and increases efficiency and incremental expansion: cooperating with Bandai to build a Gundam theme park to attract parent-child traffic and increase customer unit prices.

Policy “upstream entry” — assisted reproduction with a 20 billion incremental cake, leading high-end maternal and child care leaders are on the cusp

The annual maternity allowance of 3,600 yuan may seem small, but the “leverage effect” has significantly lowered the decision-making threshold for assisted reproduction and promoted the arrival of a “tipping point” where the penetration rate of assisted reproduction increases.

CITIC Securities estimates show that for every 10,000 yuan reduction in treatment costs, the penetration rate of assisted reproduction increases by about 1.2 percentage points. According to this estimate, the new policy may push China's ART penetration rate to rise from 7.9% to 10% (2026), and the corresponding market size will expand from 40 billion yuan to 60 billion yuan.

In this process, companies such as Jinxin Reproduction (01951), which has licensed resources, and Beckham Medical-B (02170), which has a technical card slot, will be the first to benefit.

The Zhitong Finance App learned that Jinxin's overseas reproductive business reached a record high in 24 years after facing shocks. The Chengdu business successfully completed the top three upgrades, three generations of licenses and important strategies for genetic testing. The Greater Bay Area has also established the foundation for the development of Hong Kong and Shenzhen over the next 10 years, ranking among the top in terms of business volume, business type, and business area. In the next step, the company's many medical and product capabilities will meet with users one after another in the future and continue to be iterated, including: reproductive health cross-cycle products; female reproductive health products; artificial intelligence support insurance for reproductive health; and repositioning of international business.

BOC International's previous research report pointed out that it is firmly optimistic about the strength of domestic and foreign fertility policies to support fertility intentions. Demand for assisted reproduction has sufficient momentum for long-term growth, and there is strong certainty that the company will continue to benefit as an industry leader in mainland China.

In addition to assisted reproduction, the policy package exceeded expectations, and high-end maternal and child care was also on the rise. Based on the calculation of families with two children, they can receive a total of 21,600 yuan in subsidies over 3 years, which is equivalent to 30% to 50% of the expenses of high-end confinement clubs. Increased ability to pay is expected to accelerate the penetration rate of postnatal care racetracks.

According to the Santa Bella prospectus, the penetration rate of the post-natal care market in mainland China is 17% in 2024. Compared with 57% in Singapore, 68% in South Korea, and 77% in Taiwan, there is clear room for growth. The successive implementation of policies such as childcare allowances, special additional deductions for the care of infants and children under 3, and three children is expected to increase residents' desire to have children to a certain extent, expand the newborn population base, and have a positive impact on the post-natal care industry, including confinement centers. Focus on the long-term development opportunities of leading companies in the post-natal care service industry.

Simply put, the essence of the childcare allowance policy is the social sharing of maternity costs. This transformation is reshaping the underlying logic of the maternal and child consumer market. As a leading high-end maternal and child care service company in China, Santa Bella (02508) has created differentiated competitiveness through “medical-grade nursing+luxury experience”, leading the quality service benchmark, and has become one of the biggest beneficiaries of this round of policy dividends, which is expected to transform policy dividends into continuous performance growth.

Focus on the “scale+inclusiveness” of childcare services on the two-dimensional children's consumer circuit, welcome profit and ready to go

The childcare subsidy policy is changing the cost structure of Chinese families, and childcare services, as the most direct carrier of the policy, will experience a historic shift from “marginal choices” to “mainstream programs.” In this process, investors should focus on two types of companies:

First, chain brands with scale barriers, such as Weichuang Co., Ltd. (002308.SZ), as the largest preschool education group in the country, manage more than 5,200 kindergartens. Smart classrooms cover 3,800 kindergartens, reduce labor costs by 30%, and aim to add 660,000 nurseries in 2025. Second, Inclusive operator - Vosges Co., Ltd. (002083.SZ). The company's “Xiaofuxing” community childcare covers 15 cities, with revenue growth of 120% in 2024, and profit breakthroughs: the single-store payback period was reduced to 18 months, and asset-light operations countered industry risks.

As an important component of maternal and child consumption, the children's clothing market will benefit from both the recovery in fertility and the upgrading of consumption. Meanwhile, the childcare subsidy policy is reshaping the underlying logic of the child consumer market, shifting from “just enough is enough” to “quality first.” In this transformation, companies with the following characteristics will stand out.

First, companies with higher brand awareness, such as the Balabara brand under Semma (002563.SZ), ranked first in children's clothing in China with a 4.9% market share. In recent years, they have bucked the trend and increased their efforts to open stores and continue to seize market share. Among sports brands, Anta (02020) sports children's footwear market share is leading its peers.

Second, it has strong channel control, such as Goodboy International (01086), a leading high-end baby footwear and clothing company, which has a huge sales network in China, including more than 5,000 self-operated retail outlets and nearly 1,000 distributors, covering 31 provinces, cities, and autonomous regions across the country. In addition, the Group is also actively expanding online sales channels and selling through e-commerce platforms and third-party shopping malls.

In summary, with the official implementation of the Child Care Allowance System Implementation Plan, China's maternal and child consumer market is entering a historic inflection point. From infant formula, mother and child retail to assisted reproduction and high-end care, policy dividends are being transmitted step by step along the entire “birth-nursing-childcare” industry chain, spawning structural opportunities in the 10-trillion blue ocean market. It is worth noting that this round of the market is not only driven by emotions, but also a substantial improvement in the fundamentals of the downturn in population policies. Investors are advised to follow the hierarchical layout of “just need → upgrade → innovation” to explore the real alpha target in policy beta.