20130927-DBS_Group-Food___Beverage_Cart_-_September_Episode_42页_805kb

报告摘要

Food & Beverage Cart - September Episode Summary

Core Content

This report provides an analysis of the Food & Beverage (F&B) industry in China and Hong Kong, focusing on cost trends, industry dynamics, and investment strategies for the month of September 2013. It highlights how different sub-sectors are affected by changes in raw material prices and outlines the investment ratings for key companies.

Main Points

Cost Trends

Domestic raw milk prices are rising (7% y-o-y in 9M13), which is beneficial for China Modern Dairy (1117 HK) due to its pricing power.
Imported milk powder prices are falling, which is positive for Want Want (151 HK) and Yashili (1230 HK).
PET and flour prices are increasing, potentially squeezing the margins of beverage and noodle producers like Tingyi (322 HK), UPC (220 HK), and China Foods (506 HK).
Malting barley prices are decreasing in September, which could benefit the beer industry in the long run.

Industry Dynamics

Beer production volume dropped by 1.5% y-o-y in August, leading to underperformance in share prices.
Domestic wine production volume fell by 16% y-o-y in August, with the Mid-Autumn Festival not contributing to growth.
Dairy industry shows relatively stable growth, with Mengniu (2319 HK) being a key player.
Instant noodle and beverage sector saw mixed performance, with Tingyi (322 HK) and Want Want (151 HK) being positively impacted by lower input costs.

Investment Tactics

Positive outlook: CMD, Want Want, and Yashili.
Negative outlook: UPC and China Foods due to rising cost pressures.
Top picks: Mengniu for market consolidation, CRE (291 HK) and Tsingtao Brewery (168 HK) for steady growth and margin improvements.
Recommendations: Shorting China Foods and Yurun (1068 HK) due to prolonged recovery.

Key Information

Summary of Investment Recommendations

Company	Code	Rating	Reason
China Modern Dairy	1117 HK	BUY	Rising raw milk prices
Want Want	151 HK	HOLD	Declining imported milk prices
Yashili	1230 HK	NR	Declining imported milk prices
UPC	220 HK	HOLD	Rising PET and flour costs
China Foods	506 HK	FV	Rising PET and flour costs
Yurun	1068 HK	FV	Prolonged recovery

Sensitivity Analysis to Raw Materials

Company	Segment	Material	% of COGS	YTD y-o-y % Sep-13	YTD vs. FY12	Change % Sep vs Aug	FY13 vs FY12 % DBS Assumption	Monthly Movement Impact to Profit
Tingyi (322 HK)	Beverage	Sugar	10%	(14.5)	(12.2)	(0.1)	(10)	57%
	Beverage	PET	60%	9.7	7.6	6.7	(0.5)	25%
	Instant Noodle	Palm oil	14%	(24.1)	(18.5)	(18.5)	(10)	34%
	Instant Noodle	Wheat flour	16%	10.2	9.3	8.2	5	34%
Uni-President (220 HK)	Beverage	Sugar	10%	(14.5)	(12.2)	(0.1)	(10)	65%
	Beverage	PET	55%	9.7	7.6	6.7	(0.5)	25%
	Instant Noodle	Palm oil	15%	(24.1)	(18.5)	(18.5)	(10)	34%
	Instant Noodle	Wheat flour	15%	10.2	9.3	8.2	5	34%
Want Want (151 HK)	Rice cracker	Rice	16%	(3.6)	(3.4)	(3.2)	(0.2)	24%
	Beverage	Milk powder	33%	61.8	58.9	58.2	0.6	52%
	Beverage	Sugar	4%	(14.5)	(12.2)	(12.1)	(10)	25%
	Beverage	Tin	50%	5.4	4.6	4.3	0.3	51%
	Snacks	Milk powder	6%	61.8	58.9	58.2	0.6	23%
	Snacks	Sugar	17%	(14.5)	(12.2)	(12.1)	(10)	25%
	Snacks	Film	33%	9.7	7.6	6.7	0.9	25%
Mengniu (2319 HK)	Dairy	Milk	50%	6.8	6.2	5.5	0.7	100%
China Foods (506 HK)	Beverage	Sugar	15%	(14.5)	(12.2)	(12.1)	(10)	40%
	Beverage	Aluminum	20%	(7.9)	(7.0)	(6.8)	(0.2)	590%
	Beverage	PET	15%	9.7	7.6	6.7	0	5%
CRE (291 HK)	Beer	Barley	15%	34.4	26.9	27.0	(0.1)	22%
	Beverage	Rice	8%	(3.6)	(3.4)	(3.2)	(0.2)	55%
Tsingtao (168 HK)	Beer	Barley	15%	34.4	26.9	27.0	(0.1)	100%
	Beverage	Rice	8%	(3.6)	(3.4)	(3.2)	(0.2)	100%

Conclusion

The report highlights that while some sectors face rising input costs, others benefit from favorable trends. Dairy and beer industries show potential for improvement due to rising raw milk and falling barley prices, respectively. Conversely, companies like UPC and China Foods are under pressure due to increasing costs of PET and flour. The analysis suggests a long-term investment in dairy and beer players, with a focus on those with strong pricing power and improving margins.

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