报告名称：China Foods Alert(00506.HK)Potentially increase scale of Coca Cola bottling busi
报告类型：港股研究
报告日期：2016-02-11
研究机构：德意志银行
股票名称：中国食品
股票代码：00506
页数：1
简介：Coca Cola to refranchise bottling business
Coca Cola (KO.N, Buy) announced that it has entered into a non-binding letter of intent to refranchise its bottling operations in China to its existing partners China Foods Limited, and Swire Pacific (0019.HK,NR), as part of its recent global refranchising initiatives. The statements are confirmed by China Foods in its announcement on Feb 10.
China Foods might acquire minority interest of the beverage segment
China Foods holds 65% interest in the COFCO Coca-Cola Beverage limited (the beverage segment), which has distribution rights of Coca Cola products in 15 provinces. We think China Foods could acquire 35% equity interest from Coca Cola or/and other sales region under the refranchising plans.
Impact on 2016 EPS could range from -11~28% depends on deal structure
We expect the impacts on EPS to depend on 1) acquisition P/E; 2) financing methods (equity or loan, at what price); 3) business terms on additional marketing spending or new products. Based on valuation range of global Coca Cola bottling peers, we estimated -11~28% impact on our 2016 EPS forecast based on assumption below:
Background of Coca Cola’s bottling business in China
Coca Cola’s bottling business is operated by China Foods, Swire Beverage and the company itself in China. China Foods’ beverage segment has the exclusive right to manufacture and distribute Coca-Cola products in 15 regions including Tianjin, Hebei, Beijing, Shandong, Hunan, Jiangxi, Guizhou, Hainan, Gansu, Ningxia, Qinghai, Tibet, Inner Mongolia, Xinjiang and Guangdong (Zhanjiang and Maoming). It has minority equity stakes in Coca-Cola bottling companies located in Guangdong, Zhejiang and Jiangsu.

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