20150710-DBS_Group-China_Food___Beverage_Monthly_34页_1mb

报告摘要

F&B Sector Analysis Summary

Core Content

This report provides an analysis of the Food & Beverage (F&B) sector, highlighting valuation trends, share price performance, share repurchases, and raw material cost movements. It emphasizes the importance of focusing on high-quality companies and offers stock recommendations based on financial fundamentals and market conditions.

Main Points

Sector Valuation: The F&B sector is currently trading near its 5-year low, with a FY15/16F PE of 21.4x/17.9x, which is considered attractive.
Share Price Performance: HK-listed F&B stocks have underperformed the HSI index by 2% and 22% over 1-month and 12-month periods respectively.
Share Repurchases: Several F&B companies have initiated share buybacks, indicating confidence in their financial positions and future prospects. Examples include Tingyi, Want Want, and Huishan Dairy.
Stock Recommendations: The report recommends focusing on quality names such as China Mengniu and Want Want due to their strong financial positions and potential for earnings growth.
Key Companies: China Mengniu, Want Want, and China Modern Dairy are highlighted as top picks with Buy ratings, while Tingyi and Tsingtao are recommended as Hold.

Key Information

Valuation Table

Company Name	Price (HK$)	Target Price (HK$)	Upside (%)	Rec	FY15 PE (x)	FY15 Market Cap (HK$m)
China Mengniu (2319 HK)	36.50	45.80	25	Buy	18.5	71,587
Want Want (151 HK)	8.23	9.80	19	Buy	20.1	108,075
China Modern Dairy (1117 HK)	2.38	3.45	45	Buy	8.0	11,489
Tingyi (322 HK)	15.18	17.60	16	Hold	21.9	85,067
Tsingtao (168 HK)	45.45	45.00	(1)	Hold	24.4	61,402
China Yurun (1068 HK)	2.30	3.80	65	Hold	34.0	4,192

Share Price Performance

Brewery Sector:
- Tsingtao Brewery-H (168 HK): -8.1% (1-month), -16.4% (3-months), -13.9% (6-months), -24.2% (12-months)
- Tsingtao Brewery-A (600600 CH): -28.7% (1-month), -15.3% (3-months), -5.6% (6-months), +1.6% (12-months)
Dairy Sector:
- China Mengniu (2319 HK): -10.8% (1-month), -15.8% (3-months), +9.6% (6-months), +2.1% (12-months)
- Bright Dairy (600597 CH): -30.5% (1-month), -17.1% (3-months), -9.7% (6-months), +13.4% (12-months)
Instant Noodle & Beverage and Others:
- Tingyi (322 HK): +2.3% (1-month), -16.0% (3-months), -14.2% (6-months), -29.7% (12-months)
- Want Want (151 HK): +1.4% (1-month), -8.4% (3-months), +18.2% (6-months), +22.8% (12-months)

Share Repurchases

Tingyi: Repurchased 0.40m shares at HK$13.80-HK$15.48 each since June.
Want Want: Consistently repurchased shares, totaling 20.8m shares or 0.158% of its share capital YTD.
Huishan Dairy: Chairman Yang Kai purchased c.110m shares in the open market in the past one week.

Key Trends

Most F&B companies are in strong financial positions, with the ability to conduct share buybacks to support their share prices.
The report suggests that the sector is becoming more attractive due to the current valuation levels.
The focus is on quality names with strong cash positions and potential for earnings growth, particularly in the dairy and beverage sub-sectors.

Conclusion

The F&B sector is currently undervalued, with most companies in strong financial positions and the potential for share buybacks to support their valuations. The report recommends focusing on quality names such as China Mengniu and Want Want, which have shown potential for growth and are currently rated as Buy. Other companies like Tingyi and Tsingtao are rated as Hold, indicating they may not offer the same growth potential at this time.

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