中国消费行业 - 星展集团研究部

Hong Kong / China Industry Focus
China Consumer Sector

DBS Group Research . Equity 2010

China consumers 2014
• We looked at the US retail industry evolution, which
suggests that China will sustain as a huge pie for
consumption growth and prosperity for at least another 5
years.
• Chinese chain retailers are seeing ample growth potentials
amid low industry penetration & favourable government
policies. F&B players also leverage on changing consumption
patterns for further expansion.
• By applying what we learnt from history, we believe that
Gome, Golden Eagle, New World Department Store,
Lianhua, China Foods, China Mengniu, China Yurun and
Want Want could be key beneficiaries across the structural
uptrend of China consumers.
China being the world’s 2nd largest retail market. By
tracing the retail market development in the US, the largest
retail market globally, Chinese consumer space remains in a
premature stage and posts ample growth potentials. Coupled
with a closer look at the change in consumption patterns and
product life cycles, some common key growth trends for the
sector are emerging, making China consumer plays must-buys
in the medium term.
Safe-haven for key players. Against the backdrop of an
early development stage, major chain store operators in various
retail formats should likely enjoy a honeymoon period along
with rising spending powers in China. Leading food &
beverage players could also ride on gradual shifts in product
demand for new growth drivers.
Our basket of preference. We believe potential
outperformers could possess better expansion strategies
towards high-growth areas, successful brand building, wellestablished
supplier relationship, strong customer loyalty, and
well-executed acquisitions. Companies with better strengths in
these areas should likely be key beneficiaries over the mediumterm

Table of Contents
Investment summary 3
Retail in China 4
Industry evolution 4
Changing consumption patterns 10
Stock picks and valuation summary 13
Risks and concerns 20
Food & Beverage, Catering 22
Prelude-Buy the potentials 22
A further Step - Life cycles analysis 24
External propeller - Deep into the rural 26
Risk & Concerns 27
Medium-term view – Overweight fast-growing sectors   28
Long-term trend - On-going consolidations 29
Stock picks – Find the STARS 30
Valuation Summary 36
Stock Profiles – Chinese retailers 38
Beijing Jingkelong 38
Golden Eagle 40
GOME Electrical Appliances 42
Lianhua Supermarket 44
Lifestyle International 46
New World Department Store 48
Parkson Retail Group 50
Wumart Stores 52
Stock Profiles – China food & beverage 54
Ajisen China 54
China Foods 56
China Mengniu Dairy 58
China Yurun 60
Little Sheep 62
Tingyi Holding 64
Tsingtao Brewery 66
Want Want China 68
Appendix: 70
A. Government’s target to skew growth towards
consumption 70
B. China’s improvement in transportation
infrastructures 72
C. China Retail Charts 75
D. Food, Beverage, and Catering 90
E. PE & PB Band Charts 99