Total 25 pages

Table of Contents
Inflation – Less Fundamental Impact, More Sentimental Fears ...............................................................................3
Investment Conclusion................................................................................................................................................................. 3
Stock Implications........................................................................................................................................................................ 4
Inflation Cycle: This Round vs. Last Round...............................................................................................................5
Government Price Control ...........................................................................................................................................6
2007/08 Experience..................................................................................................................................................................... 6
What Could Happen this Time? ................................................................................................................................................... 6
Stock Performance during Inflationary Periods ........................................................................................................8
Fundamental Performance during Inflationary Periods..........................................................................................11
Pricing Trend of Major Raw Materials.......................................................................................................................12
Pricing Power – Who Could be Squeezed?..............................................................................................................13
Room for ASP Increase in Select Product Categories............................................................................................................... 13
Evaluating the Pricing Power of F&B Companies ...................................................................................................................... 13
Examples of Price Hikes ............................................................................................................................................................ 13
Earnings Sensitivity and What’s Implied in Our Forecasts ....................................................................................16