【出版时间及名称】:2010年韩国食品饮料行业展望
【作者】:Korea Investment
【文件格式】:pdf
【页数】:45
【目录或简介】:
Highlighted growth momentum
Maintain Overweight
We maintain Overweight due to the following. First, we expect the
profitability of F&B companies to improve in 2010 in line with KRW
-denominated grain price drops. F&B stocks tend to outperform the
Kospi when KRW-denominated grain prices make a downturn after a
rise. Second, their PER premium has fallen near to the bottom of the
historical band. F&B plays deserve premiums given the sector’s stability
and the market dominance of listed companies. Their burgeoning
operating momentum offers share upside.
Profitability to improve on stable grain prices and strong KRW
Except raw sugar, the prices for most grains will likely fall YoY in 2010
due to weak demand and increased beginning inventory, and healthy
harvest. We expect the year-average FX rate to fall 14.4% YoY in 2010F
and the input cost for raw materials to drop more than 20% YoY from
2009. Commodity food makers should see better profitability until 1H10
thanks to slow product price cuts. Processed food makers should see
structural profitability improvement as their product prices will likely
remain unchanged.
Long-term growth momentum
Orion’s confections business in China provides strong growth potential.
Sales in China should deliver a CAGR of 24.3% over the next three
years thanks to the confections market growth, Orion’s market share
gains thanks to strong brand and sales expansion to inland cities. The
operating margin of Chinese subsidiaries should jump from 7.3% in
2009F to 9.6% in 2010F thanks to a lighter fixed cost burden. CJ
Cheiljedang’s lysine business also has ample growth potential. Animal
feed markets in China and elsewhere should expand on rising incomes
and lysine prices should remain strong thanks to the widening spread
with the prices of alternatives. The growth driver behind KT&G is wholly
owned subsidiary Korea Ginseng Corp. that has strong growth potential
thanks to health-conscious consumers and the popularity of red ginseng.
Despite fiercer competition, its market dominance should remain intact
thanks to the specialization in the 6-year-old red ginseng segment.
CJ Cheiljedang, KT&G, and Orion appear promising
CJ Cheiljedang, KT&G, and Orion are our sector top picks. Investment
points for CJ Cheiljedang include benefits from raw material cost drops
and improving processed food and lysine businesses. KT&G appears
attractive with its low valuation and thriving red ginseng business. Orion
deserves attention given its flourishing overseas confections businesses
and the possible recovery of overseas investment from the forthcoming
IPO of Pan Orion in 2011. We raise Orion’s price target to W310,000 to
reflect the possible RMB appreciation.