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| 研究机构：高盛高华证券 分析师： Joey Z ... 撰写日期：2010年10月28日 | 字体[ 大 中 小 ] |
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We expect the mid- to high-end/premium Chinese spirits market tocontinue to grow, driven by higher disposable income, the urbanizationtrend, and consumers’ health concerns. On the other hand, we see mid- tolow-end/economy-type Chinese spirits products experiencing low or nogrowth. We expect this bifurcating trend to drive the growth of the threetier-1 leading Chinese spirit producers, Kweichow Moutai, Wuliangye andLuzhou Laojiao.
Spirits consumption: Exciting growth potential。
Per capita spirits consumption remains low in China vs. other countries onboth a volume basis and from a product mix perspective. We see excitinggrowth potential for spirits consumption and product mix improvement(currently premium spirits only account for 7% of the market vs. 33% onaverage for mature markets), implying scope for further overall ASPimprovement.
Wuliangye: Top pick among our Chinese spirits coverage universe。
We initiate on Wuliangye Yibin with a Buy rating and add it to theConviction List. We expect Wuliangye to register 34% 2009-2012E earningsCAGR, driven by strong volume growth and better ASPs. We highlight itsimproving CROCI trend and believe the market has not yet recognized it asa consistent first-quartile returns company. Our 12-month target price forWuliangye of Rmb43.7 implies 26X 2011E P/E. We maintain our Buy ratingon Kweichow Moutai (12-month target price raised to Rmb189.2;transferring primary coverage to Joey Zeng) and initiate coverage onLuzhou Laojiao with a Neutral rating and a 12-month target price of Rmb41.3.
Valuation, stock-picking factors and key risks。
Our primary valuation methodology is the cash returns-based Director’sCut, cross-checking the implied P/E valuations against historical averagelevels. Other than valuation, our stock picks are determined by factors suchas: pricing power and earnings growth potential, room to improve productmix, competitiveness of distribution, and expected returns trend. Weremain positive on leading Chinese spirit companies. Key risks: unexpectedweakening/strengthening in demand; later-than-expected & smaller-thanexpectedannouncement of price hike.
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