Consumers Sector

Consumers Sector

Postby winston » Thu May 27, 2010 12:42 pm

Not vested.

China

DJ MARKET TALK: China Drinks Sector Outlook Defensive -Taifook


1224 [Dow Jones] Taifook says secular growth story of China beverage sector to continue near-term, as consumption -- in particular juice drinks, bottled water -- should be fairly defensive in slowing economy.

"Affordability has improved over the years, given the significant increase in income levels, as have concerns over quality, while demand growth appears to be continuing."

Among HK-listed beverage firms, house favors Tianyi (0756.HK), as one of leading frozen concentrated orange juice (FCOJ) manufacturers that benefits from shortfall in domestic supply of FCOJ.

Also likes Tingyi (0322.HK), Want Want (0151.HK) and Uni President (0220.HK) given their aggressive expansion plans. Tianyi +3.0% at HK$2.41, Uni President flat at HK$3.93.


Source: Dow Jones Newswire
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Re: Consumers Sector

Postby winston » Thu May 27, 2010 1:09 pm

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China

DJ MARKET TALK: Mengniu JPM's Top Pick On Pricing Power Stakes


1226 [Dow Jones] JPMorgan says instant noodles, liquid milk, sanitary napkins, snacks, processed meat sub-sectors have stronger pricing power than beer, tissue, diaper, while beverage segment doesn't have much pricing power. adds better pricing power would allow them to pass on cost pressure when input prices increase, maintain prices when input prices decline.

JPM's top sector pick is Mengniu Dairy (2319.HK); keeps Underweight call on Tingyi (0322.HK), Uni-President China (0220.HK) given competitive pressure.

In beer, prefers China Resources Enterprise (0291.HK) over Tsingtao Brewery (0168.HK); adds, relatively comfortable on Hengan (1044.HK), Want Want China (0151.HK) for pricing power, recommends accumulating on declines.

Source: Dow Jones Newswire
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Re: Consumers Sector

Postby winston » Mon Sep 13, 2010 5:21 pm

Not vested. From UOBKH:-

Consumer - China

For the time being, we prefer pork-related companies, such as China Yurun (1068 HK) and Shenguan (829 HK) because they are beneficiaries of rising pork prices.

Also we like beer producers due to their steady sales volume growth and margin improvement, such as Tsingtao Brewery (168 HK) and China Resources Enterprise (291 HK).

We are cautious on instant noodles, dairy and beverage producers because it is not easy to pass on cost increases in an inflation environment.

http://research.uobkayhian.com/research ... 121148.pdf
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Re: Consumers Sector

Postby winston » Thu Oct 14, 2010 11:24 am

China Consumption

DJ MARKET TALK: China Consumption Plays' Valuation Lofty -CS
Aug 30, 2010

1152 [Dow Jones] While structural growth story in China consumption remains attractive theme, Credit Suisse's concern is "whether this is more than reflected in share prices."

Says good news for valuation believers is that these stocks finally started to underperform, but despite such recent underperformance, house keeps Underweight call in regional context.

CS highlights Hengan International (1044.HK) as example of lofty valuations; estimates Hengan commands 259% premium vs regional peers, and "it is not just Hengan that is trading at a premium of more than 200% to the region," noting Want Want China's (0151.HK) premium at 244%, Tingyi's (0322.HK) at 243%.

Source: Dow Jones Newswire
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Re: Consumers Sector

Postby winston » Thu Oct 14, 2010 4:12 pm

China Consumption

DJ MARKET TALK: CS Keeps China Consumer Sector At Underweight

0744 GMT [Dow Jones] Credit Suisse keeps Underweight call on China consumer sector. Says while remaining attracted to China consumption's structural growth story (35% of GDP vs 70% in U.S.), house is put off by rather rich valuations.

"We believe potential catalysts for further underperformance include greater investor confidence in a global and China soft-landing and the upcoming reporting season."

Notes in May, August reporting seasons, several Chinese consumer names, such as Tingyi (0322.HK), China Mengniu Dairy (2319.HK), missed on earnings.

Tips three most-overvalued China consumer plays as Want Want (0151.HK), Hengan (1044.HK), Tingyi.

Says Belle (1880.HK), Anta Sports (2020.HK), Mengniu also overvalued.

Suggests switching to more undervalued consumer names such as Kia Motors (000270.SE), Hyundai Mobis (012330.SE).

Source: Dow Jones Newswire
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Re: Consumers Sector

Postby winston » Mon Nov 08, 2010 12:47 pm

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China Food & Beverage

DJ MARKET TALK:CPY Cuts China Food&Beverage Sector To Neutral


1140 [Dow Jones] Core Pacific-Yamaichi tips near-term pressure for China food & beverage producers on input cost rise. House cuts rating on China food & beverage sector to Neutral vs Overweight, mainly due to concerns over rising food inflation.

But adds, "we expect sustained personal income growth will contribute to rising food expenditure in the long run."

House likes category leaders for strong pricing power amid growing cost concern.

Keeps Tsingtao (0168.HK) as top pick for successful sales mix improvement, premium brand name, rising average selling price and margin expansion. Stock down 0.3% at HK$43.25.

Source: Dow Jones Newswire
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Re: Consumers Sector

Postby winston » Wed Nov 17, 2010 2:30 pm

China Consumers

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DJ MARKET TALK: Citigroup Likes Mengniu, Hengan, Tingyi

1215 [Dow Jones] STOCK CALL: With China consumer staples sector trading at 23X-28X FY11 earnings (PEG ratio about 1.1), Citigroup looks at which companies merit current (or higher) valuations based on volume growth potential, margin trends in next 3-5 years.

House most likes pork, personal hygiene sub-sectors due to strong growth (from penetration or consolidation), pricing power, bearish on beer as both volume growth, pricing power weak.

Citi has Buy ratings on China Mengniu Dairy (2319.HK), Hengan (1044.HK), Tingyi (0322.HK), rates Tsingtao Brewery (0168.HK) Sell.

Likes Mengniu for strong momentum in product-mix improvements, cheap valuations; Hengan due to high growth in prospect, strong pricing power; expects Tingyi's net profit growth to resume next year.

Target prices for these 3 stocks HK$28.00, HK$78.00, HK$23.00 respectively.


Source: Dow Jones Newswire
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Re: Consumers Sector

Postby winston » Tue Dec 14, 2010 12:21 pm

China Furnitures

DJ MARKET TALK: HK Furniture Plays Stand Out; Undemanding

1138 [Dow Jones] Samson Holding (0531.HK) is +4.0% at HK$1.56, Royale Furniture (1198.HK) is +3.9% at HK$3.75, and Man Wah (1999.HK) is +2.1% at HK$12.70, outperforming amid an otherwise listless, and directionless broad market (the HSI is +0.2%).

Attraction for these furniture makers is their relatively undemanding valuations vs other mainland consumption plays, although for now Samson, and Man Wah remain export-oriented.

Royale has been the best performer recently, +22.5% since Dec. 7 when an exchange filling showed that Value Partners (0806.HK) raised its stake in the company.

At the current share price, Royale is trading at 10X FY11 earnings based on the Thomson Reuters' consensus; this remains undemanding vs mainland consumption plays, which can easily command 20X forward P/Es.

Source: Dow Jones Newswire
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Re: Consumers Sector

Postby winston » Mon Feb 14, 2011 10:33 am

Chinese Consumer Sector

DJ MARKET TALK: Bottom-Fish Quality China Consumer Stocks -UOB-KH

0937 [Dow Jones] UOB KayHian says share prices of Chinese consumer stocks under its coverage have fallen 15%-20% over the past three months on worries of further tightening amid escalating inflation.

"The correction offers bottom-fishing opportunities for quality companies." The house recommends accumulating shares of companies that have pricing power.

It likes luxury retailers, such as Hengdeli (3389.HK), Luk Fook (0590.HK); department stores such as Golden Eagle (3308.HK); it also likes high-end menswear retailer Trinity (0891.HK), tissue paper producer Hengan (1044.HK), and supermarket operator Wumart (8277.HK).

Source: Dow Jones Newswire
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Re: Consumers Sector

Postby winston » Thu Feb 17, 2011 3:28 pm

China Consumer Staple

DJ MARKET TALK: China Staples Plays' Cost Pressure To Ease -JPM

1206 [Dow Jones] JPMorgan expects China consumer-staples companies' earnings growth to average 19% on-year in 2H10 compared with 1H10's 17% growth, but it adds margin erosion for the sector, as well as most companies, likely continued in 2H10.

It expects the sector's 2010 earnings growth at 16% on average, compared with 39% posted in 2009.

"We expect the input cost pressure to ease in 2011 and staples companies to maintain margins, delivering 23% earnings growth on 23% sales growth."

But the house adds, its margin estimates have downside risk if input prices continue to increase as it expects most sector plays have limited pricing power.

Its top picks remain China Yurun (1068.HK), Want Want (0151.HK) and Hengan (1044.HK); it says it is negative on Tingyi (0322.HK).


Source: Dow Jones Newswire
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