20180604-广发证券_香港_-Dim_Sum_Express_4页_492kb

报告摘要

Dim Sum Express Summary

Core Content Overview

This document provides an analysis of key market indices and a specific stock recommendation for Yihai International (1579 HK), along with insights into the agriculture sector, particularly focusing on the hog price rebound.

Key Market Indices Performance

Market	1D Chg (%)	1M Chg (%)	YTD Chg (%)	18E EPS (%)	19E EPS (%)	18E P/E	19E P/E
HSI	0.1	1.9	1.9	43.7	10.5	11.8	10.7
HSCEI	0.4	1.1	2.7	25.5	10.4	8.0	7.2
MXCN	0.9	3.6	4.5	56.6	15.8	13.2	11.4
SHSZ300	-0.8	-0.1	-6.5	35.3	15.0	12.6	11.0
SHCOMP	-0.7	-0.5	-7.0	39.9	13.6	12.1	10.6
SZCOMP	-1.2	-2.4	-8.1	75.7	23.2	19.1	15.5
INDU	0.9	1.5	-0.3	40.3	8.8	16.2	14.9
SPX	1.1	2.7	2.3	46.1	10.0	17.2	15.6
CCMP	1.5	4.8	9.4	82.0	15.4	22.8	19.8
UKX	0.3	1.8	0.2	167.2	5.7	14.0	13.3
NYK	1.0	-0.3	-1.6	61.1	15.1	16.3	14.2

Main Points

Hog Price Rebound

Negative factors have been priced in, as hog prices fell sharply after the CNY, dropping below Rmb10/kg.
Farmers experienced losses of over Rmb300 per hog.
The proportion of medium/large hogs in total inventory and ex-farm hog weights has gradually decreased, suggesting a rebound is imminent.
Historically, hog prices rebounded by 29% in 2013 and 42.7% in 2014, leading to significant increases in per hog earnings.
Earnings momentum is expected during a price rebound, with examples like Muyuan Foodstuff showing QoQ growth of 336% in per hog earnings.

Sector Outlook

The agriculture sector is seen as positive, with potential for outperforming the benchmark by more than 10%.
The hog industry chain is expected to benefit from the price rebound.

Yihai International (1579 HK) Recommendation

Company Overview

Yihai International is a key supplier of hotpot condiments to Haidilao.
Haidilao has increased its restaurant count by 17% since the end of 2017, reaching 320 as of May 8, 2018.
The company plans to open 180-200 new stores in 2018, with store expansion expected to be 65.9% -80.6% compared to previous years (excluding closures).

Capacity and Demand

Yihai's Maanshan factory capacity is rising and is expected to meet the increased demand from Haidilao's expansion.
A new Bazhou plant is expected to come online in 2019, supporting future growth.

Earnings and Valuation

EPS forecasts for 2018, 2019, and 2020 are adjusted to Rmb0.36, Rmb0.46, and Rmb0.56 respectively.
The stock is currently trading at 33.20x/26.15x/21.43x P/E.
The target price is raised to HK$15.43 from HK$12.53 based on a PEG valuation of 0.78x.
The recommendation is Buy, as the company is expected to outperform the benchmark by more than 15%.

Risks

Hog price fluctuations
Risk of epidemics
Food safety issues
Competition in the hotspot condiment market
Self-heating hotpot sales missing expectations

Rating Definitions

Rating	Performance Relative to Benchmark
Buy	Outperform by >15%
Accumulate	Outperform by 5%-15%
Hold	-5% to +5%
Underperform	Underperform by >5%

Sector Ratings

Sector Rating	Performance Relative to Benchmark
Positive	Outperform by >10%
Neutral	-10% to +10%
Cautious	Underperform by >10%

Disclosure and Disclaimer

No proprietary holdings in the securities discussed.
No investment banking relationships with the mentioned companies in the past 12 months.
Recommendations are not personalized and do not consider individual investment objectives.
Disclaimer: The report is for informational purposes only and does not constitute an offer to buy or sell securities.