Consumer Staples:Faster cost pass-through, turning point may be around the corner休闲品和奢侈品

研究机构：高盛高华证券 分析师： Yifan ... 撰写日期：2011年01月21日

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    We expect most staple companies to see the biggest margin pressure in2H2010, which could possibly persist through to 1H2011, due to a typicalthree to six months’ time lag in retail prices vs. input costs. In the longterm, we see margins being driven by pricing power and product mix. Wetrim our earnings estimates by 3% on average in 2010-2012E to reflecthigher-than-expected raw material costs.
    Study shows staples start to outperform before costs peak。
    We identify three stages of staples sector performance in previous cycles.
    Stage 1: staples underperformed when input cost started to increase (Apr-Dec2003, Mar-Oct 2007). Stage 2: staples started to outperform before costspeaked, as efforts on cost pass-through took effect (Jan-Jun 2004, Nov 2007-Jun 2008). Stage 3: staples outperform more significantly when input costsdecline. We believe we are now in the middle or latter part of Stage 1.
    Increasing news flow on ASP hikes – we may be moving closer to aturning point in sector performance。
    While price hikes have been occurring from as early as Jul 2010 (Hengan),most staples companies started to raise prices from 4Q2010, as thecompanies turn to direct price hikes and more effective cost pass-through.
    Although the sector’s performance may stay muted in the near term due touncertainty over FY10 results, we believe the recent correction has largelyfactored in earnings downside and investors should start to position for apotential turning point.
    2011 top picks: Mengniu (CL), Hengan, Wuliangye (CL)。
    We add Mengniu to the Conviction Buy List as we believe it offers the bestrisk/reward with strong earnings (33% CAGR in 2011-2012E) and attractivevaluation. We reiterate our Buy rating on Hengan as growth is likely torecover in 2011 with a better product mix. We downgrade Tingyi to Neutralfrom Buy after its recent outperformance. Of the A shares, our top pick isWuliangye (Buy, Conviction List) due to a strong 2011 earnings growthoutlook on the back of potential ASP hike and strong volume momentum.
    Key risks。
    Higher-than-expected input costs; competition; policy control on pricing.