China Food, Bev. & Tobacco:Stronger Fundamentals in 2011食品饮料行业

研究机构：摩根士丹利亚洲 分析师： Lillia ... 撰写日期：2010年12月23日

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    Reiterate Overweight on Luzhou Laojiao, Moutaiand Wulaingye, and Equal-weight on Shanxi FenWine. With increasing visibility of the potential for pricehikes for premium liquor names given Moutai has raisedits ex-factory prices by 20% for 2011, we believe theseleading Chinese liquor companies should deliver fasterearnings growth in 2011 amid robust demandmomentum in an inflationary environment. At 22–24x2011E P/E, we find valuation of the top three liquorbrands (Moutai, Wuliangye and Laojiao) attractivecompared with the sector average of 35x.
    Price hike is still the key theme: With channelmark-up at 30–100% and on an increasing trend, webelieve leading spirits companies retain strong pricingpower. We think the supply shortage of premium liquorwill continue and could support a relatively high retailprice and thus leave room for ex-factory price hikes.
    Demand momentum remains strong, as indicated byoverall high-level custom repayments and industryvolume growth of 20%+ YTD.
    Earnings revisions: We raise our 2011-12e earningsby 5–18% for the liquor players to reflect the potential forgreater price hikes in 2011, especially for premiumproducts (10-15% in 2011). We expect 10-15% volumegrowth in 2011 and no/limited price hikes in 2012 for keybrands, which we think is on the conservative side. Ourtop picks are Moutai (31% upside) as the price leader,followed by Laojiao (29% upside) on rebound of ‘Guojiao1573’ and Wuliangye (26% upside) on mid-high endmomentum.