三星证券报告

April12,2011ThisreporthasbeenpreparedbySamsungSecurities(Asia)Limited.ANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESBEGINONPAGEError![e-mail][e-mail][e-mail][e-mail][phone]ConsumerSectorInflationBustersvsInflationCrashers…WHAT’STHESTORY?Event:Themaindebateduringfull-year2010’sresultsseasonrevolvedaroundinflation.Webelievethatthemarketwillrewardstocksthatproveabletoresisttheravagesofinflationthroughpricingpower—wecallthesethe―InflationBusters,‖andpunishthosethatsuffermargindeterioration—the―InflationCrashers.‖Impact:Inthisreport,wereview2010’sresults,sumupourviewbysub-sector,andidentifystocksthatwebelievewillbeabletobeabletomitigatethenegativeeffects,orfallprey,toinflationin2011.Action:WereiterateourBUYcallsonChinaYurun,SparkleRoll,andEmperor(InflationBusters)andourSELLsonTingyiandHengan(InflationCrashers).THEQUICKVIEWFollowingourpreviewreport―Tradingideasaround2010results,‖publishedFeb22,2011,wewrapupthisreportingseasonbysummarizingresultsforourstocksundercoverageandzeroinonthemaintrends.TheHK-listedConsumerSectorcontains107stocksandencompassesdiversebusinessmodelsfromporkprocessingtohigh-endwatchandjewelleryretailers.However,wethinkthatthereisakeyinvestmentthemethatcutsrightthroughthesector:Inflation.2010resultshighlightthedifferencesbetweentwosetsofcompanies:InflationBusters:ThesearegroupsthatareabletomitigatetheeffectsofinflationbypassingthroughASPincreases,showingbrandstrengthandadvantageousmarketpositioning,andcontinuetoimprovesourcingefficiencies.Thesestocksperformedwellafterresultsandourtoppicksconsistofinflation-bustingstocksthatwefindattractivelypriced.InflationCrashers:Thesearecompaniesforwhichinflationisvisiblybitingintomargins.Ourhigh-convictionSELLsareoncompaniesforwhichweseecontinuedmargindeteriorationin2011,combinedwithrelativelyunattractivevaluations.Figure1:InflationBustersvsInflationCrashers:OurtopBUYandSELLcallsStockBBGTickerSSARatingTargetPriceUp/DownSideMarketCap(US$m)P/EFY11eFY12eP/BFY11eFY12eYieldFY11eInflationBustersChinaYurun1068HKBUY★★★32.0014.5%6,37320.6x15.1x3.0x2.5x1.1%SparkleRoll970HKBUY★★★2.2058.3%54014.6x10.3x3.1x2.5x1.4%Emperor887HKBUY1.3926.4%83813.5x10.1x2.3x1.9x2.3%InflationCrashersTingyi322HKSELL15.00-24.8%13,77233.5x25.0x8.0x7.7x1.7%Hengan1044HKSELL51.00-17.9%9,52928.1x21.5x6.1x5.5x2.1%Source:SSAestimates.PricedasofmarketcloseApr11,2011;targetpricesinHK$.ChinaConsumeramaApril12,2011ConsumerSector2Resultsroundup:Hit,beatormissed?OurStrategyteambelievesthatChinaiswellonthewaytocontrollinginflationandthattheeconomyisalreadycooling.Thisdoesnot,ofcourse,meanthatthereisnoneedtobevigilantreinflation(indeed,ourStrategyteamthinksthatthePPIinMarchwillstillbeabove7%andtheCPIcloserto5.5%),justthatinflationisnolongeroutofcontrol.Nevertheless,inflationcontinuestobeakeyconcernforinvestors,andwethinkthattheabilityofbusinessmodelstomitigatecostpressurevialeveragingbrandstrengthtoraiseASPswasakeyfactorincompanies’beingabletohitorbeatmarketexpectationsduring2010resultsseason.Likewise,wethinkthatcompaniesthatmissedmarketexpectationsfellafoulofincreasingcostpressures,andwereunwillingorunabletopassthroughinflationtodistributorsand/orconsumersintheformofhigherprices.Amongstourcoverageuniverse,the17setsofreportedresultsacrossFebandMar2011wereamixedbag;eightcompaniesmissedmarketconsensusexpectations,sevenhitexpectations,andtwobeat(source:Bloomberg):Companiesmissedforavarietyofreasons,butwethinkthatthemostnotableareChinaMengniuandTingyi,bothofwhichmissedduetowider-than-expectedgrossmargincontractionduetocostinputinflationandmanagementsthatwerenotabletoraisesellingprices.ThelargestsurpriseontheupsidewasChinaYurun,whichbeatconsensusEPSexpectationsby11%onthebackofhigher-than-expectedhogslaughteringvolumesandstrongGPM.Figure2:Stockpriceactionthrough2010results(HK$)StockPricebefore2010earningsreleasePrice5daysafterearningsrelease%ChangeTingyi18.8420.8010.4%Yurun23.6526.8013.3%WantWant6.396.775.9%Mengniu20.124.0019.4%GoldenEagle16.8819.5215.6%Parkson11.9610.88-9.0%ChinaLilang10.7810.880.9%Xiniya4.454.859.0%PeakSport4.925.266.9%361°5.495.29-3.6%Emperor0.970.91-6.2%ChinaHaidian1.011.108.9%Li&Fung42.9539.85-7.2%Esprit38.7541.005.8%Hengan59.7557.15-4.4%Vinda7.668.257.7%Bawang2.392.34-2.1%Source:BloombergTrendsinanutshellInthisreport,wegiveanaccountofthemajortrendsweseebysub-sectorandthengoontoarguethecaseforourinflation-bustingBUYcalls,followedbyourinflation-crashingSELLs.Themaintrendsweseeandourcurrentview,bysub-sector,aresummarizedbelow:ApparelandSportswearWeareselectivelypositiveontheapparelandsportswearsub-sector,forbrandsthatcanmitigateinflationviaincreasedASPs,orareevenableharnessinflation;wherethebrandspecificallytargetsChineseconsumersbenefittingfromlaborpricehikes,e.g.,PeakSportandChinaXiniya.DepartmentStoresWearecautiousonthedepartmentstoresub-sector,despitesomeencouragingsame-store-salesfigures,duetothreekeyrisks:1.Executionof