20130730-高盛-Tingyi_leads_Beverage_peak_season_promotions__expect_share_gains_17页_440kb
报告摘要
China: Consumer Staples - Summary
Core Content
This document provides an analysis of the competitive dynamics between Tingyi and UPC during the peak season for beverage consumption in China, focusing on their promotional activities and financial performance. It highlights how Tingyi's aggressive marketing strategy has contributed to its market share gains, especially in the RTD tea segment, while UPC faces challenges due to rising competition and margin pressures.
Main Points
1. Tingyi Leads in Beverage Promotions
- Tingyi launched 12 promotional campaigns from April to July 2013, compared to UPC's 8 campaigns.
- Tingyi's promotions included a greater focus on the RTD Tea segment (7 out of 12 campaigns), while UPC had a more balanced approach.
- Tingyi's mainstream beverages were priced 8-12% cheaper than UPC's, giving it a competitive edge.
- Promotional activities have become more interactive and lifestyle-focused, such as online games, social gatherings, and branded contests.
2. Market Share Gains for Tingyi
- In Mar/Apr 2013, Tingyi's RTD tea volume share increased by 1.4ppt to 47.6%, while UPC and Wahaha both lost 70bps.
- Despite the trend, UPC's RTD tea share is expected to remain resilient due to strong milk tea sales.
- The report anticipates continued market share gains for Tingyi in 2013/14 due to its promotional intensity.
3. Financial Impact of Promotions
- Tingyi's 2013-15E earnings were reduced by 0.5-2.5% due to higher SG&A spend, offset by improved GPM from lower raw material costs.
- Noodles segment margin is expected to decline due to increased promotional costs and lower growth, with EBIT margin reduced by 80bps to 9.1%.
- Beverage margins are expected to improve from 6% in 2012 to 7.5% / 8.8% in 2013/14, as top-line growth recovers.
4. Valuation Adjustments
- Tingyi's 12-month price target (TP) was reduced from HK$20.85 to HK$18.45.
- The P/E multiple was lowered from 28.8x to 24x, due to a decline in EPS CAGR.
- The two-year EPS CAGR for Tingyi is expected to fall from 26% to 22% as the valuation period is rolled forward to 2014.
5. UPC's Performance and Challenges
- UPC's recurring EPS forecasts for 2013-15 were cut by 21-22%, primarily due to higher promotional expenses in Noodles.
- The free sausage offer for Lao Tan noodles was reintroduced, increasing marketing costs.
- UPC's RTD tea share is expected to face pressure, though milk tea sales provide some stability.
Key Information
Promotional Campaigns Overview
| Manufacturer | Product on Promotion | Description | Start Date | Prize |
|---|---|---|---|---|
| Tingyi | Crystal Sugar Pear/Haw Juice | Buy to enter lucky draw | 7/24/2013 | Gift cards, mobile phone credit |
| Tingyi | Longjing Tea | Log in and send message | 7/15/2013 | iPad mini |
| Tingyi | Oolong Tea | Fill in questionnaire | 7/8/2013 | Video streaming credits |
| Tingyi | Milk Tea | Watch micro movie and share | 7/2/2013 | iPad mini, USBs |
| Tingyi | Miti-Beverage | Purchase with slogan | 7/1/2013 | Gold coins, headphones |
| Tingyi | Braised Beef Noodles | Purchase with slogan | 6/28/2013 | Travel credits |
| Tingyi | Jasmine Tea | Enter 13-digit code | 6/28/2013 | Shopping credits, mobile phone credit |
| Tingyi | Green Tea | Play online game | 5/27/2013 | Xbox |
| Tingyi | Multi-Beverage | Buy 600ml green tea | 5/24/2013 | Bicycles |
| Tingyi | Crystal Sugar Pear Juice | Purchase to enter lucky draw | 5/3/2013 | Gift cards, mobile phone credit |
| Tingyi | Milk Tea | Look under bottle cap | 4/10/2013 | Extra RTD tea, computers |
| UPC | Iced Red Tea | Regional parties for concert tickets | 2013-7-4 | Concert tickets |
| UPC | Juice Drinks | Buy PET500ml to enter lucky draw | 2013-6-5 | iPhone5, shopping credits |
| UPC | Iced Red Tea | Skateboard themed game | 2013-5-23 | Watches, T-shirts |
| UPC | Lu Rou Mian | Upload photo for contest | 2013-5-15 | iPods, noodles |
| UPC | Green Tea | Ride bicycles in cities | 5/2/2013 | Cameras, mobile phone credit |
| UPC | Crystal Sugar Pear | Enter "Don't Forget The Lyrics" contest | 2013-4-26 | Appearance, prizes |
| UPC | Jasmine Honey Tea | Look under bottle cap | 4/17/2013 | Mobile phone credit |
| UPC | Orange Juice | Enter code under bottle cap | 4/5/2013 | Travel coupons, concert tickets |
Financial Projections (2013-15E)
| Metric | 12/12 | 12/13E | 12/14E | 12/15E |
|---|---|---|---|---|
| Revenue | 9,211.9 | 11,074.7 | 12,713.8 | 14,492.1 |
| Cost of Goods Sold | -6,457.4 | -7,765.7 | -8,879.6 | -10,079.7 |
| SG&A | -2,168.1 | -2,564.0 | -2,875.8 | -3,202.3 |
| EBITDA | 1,005.4 | 1,292.0 | 1,587.4 | 1,893.8 |
| Net Income | 359.9 | 443.6 | 555.4 | 657.0 |
| EPS (basic, pre-except) | 0.06 | 0.08 | 0.10 | 0.12 |
| EPS (basic, post-except) | 0.08 | 0.08 | 0.10 | 0.12 |
| P/E (analyst) | 43.6 | 31.3 | 25.0 | 21.1 |
| P/B | 6.1 | 4.9 | 4.4 | 4.0 |
| EV/EBITDA | 17.1 | 11.8 | 9.5 | 7.9 |
| Dividend Yield | 1.2 | 1.6 | 2.4 | 2.8 |
Key Risks
- Upside: Better than expected market share and marketing spend.
- Downside: Worse than expected market share, marketing spend, or raw material cost inflation.
Investment Profile
Conclusion
The report emphasizes Tingyi's aggressive promotional strategies in the beverage sector, particularly in RTD tea, which are expected to drive market share gains. While these promotions may affect margins, recovery in top-line growth and lower raw material costs are anticipated to offset these impacts. In contrast, UPC faces margin pressure due to increased promotional expenses and slower top-line growth, leading to a reduction in EPS forecasts. The overall valuation and growth outlook for Tingyi has been adjusted downward, reflecting a more conservative growth trajectory compared to its peers.
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