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1、Deutsche Bank Markets Research Asia China Consumer Periodical Asia Consumer downgrading to Hold with target price cut to HK$2.25 (Anne Ling) ? Gome Peer Suning announces 2012 results; sees recovery in Jan/Feb (Anne Ling) ? Esprit Budget has changed, CEO tells press ? AEON Store Name change ? TSL Gra
2、nt of share options ? Shenguan Supplemental agreement related to LJK sale and purchase agreement ? Christine Retirement of CEO ? Stelux To consolidate mainland business Singapore ? Golden Agri-Resources FY12 missed; lower CPO prices dragged (Michelle Foong) Sector news China/HK ? China Retail Lao He
3、ng He targets HK IPO ? China Retail Nike to open 40 factory outlets to clear inventory ? China Consumer LOreal China sales up 12.4% yoy in 2012; developing e-commerce ? China F downgrading to Hold with target price cut to HK$2.25 (1117.HK, HKD 2.60, Hold) Adjusting FY13-15 NP forecast with lower gov
4、ernment grant and bio gains Core NP growth was in line with sales growth of 49% for 1HFY13. Sales were slightly lower than expected but lower government grants and biological asset gains resulted in much lower headline NP. What surprised the market was the increase in own-brand product sales and sal
5、es to third parties. For FY13, CMD maintains its target milk yield of 8.3 tons (7.9 tons in 1HFY13). We cut our FY13-15 NP by 5-20% on the back of 1HFY13 results with a revised target price of HK$2.25 (from HK$2.45). Given the recent rally, we downgrade to Hold. 4 March 2013 Asia Consumer downgradin
6、g to Hold This is to reflect lower herd size growth and lower government grants and biological gains. Our target price of HK$2.25 (previously: HK$2.45) is derived from DCF analysis, equating to 18.6x FY13P/E or 20.3x adjusted FY13 P/E (ex biological gains). Key downside risks: food safety, bovine di
7、sease outbreak, single client risk and volatile milk/feed cost. Upside risks: growing demand for high-end dairy products, and better- than-expected milk yield. Please refer to full report: http:/ Anne Ling Gome Peer Suning announces 2012 results; sees recovery in Jan/Feb (0493.HK, HKD 0.86, Hold) Ma
8、intaining Hold Sunings net profit dropped 44% yoy in 2012 (-1.2% for 4Q12). It expects CE demand to pick up in 2013 on the recovery in the property market. We believe both Gome and Suning share the same macro trend. We are yet to see a sustainable growth rate for the CE market in 2013 following 1Q12
9、s low base comparison. Gome will announce its 2012 results in March; it announced a profit warning for 2012 results in January. Suning 2012 NP falls below low end of guidance; improvement in Jan-Feb Suning reported a 44% yoy fall in net profit to RMB2.7bn in 2012, below the low end of managements gu
10、idance of 30-40% yoy decline in its 3Q12 results. SSSg declined 12.38% in 2012. For 4Q12, sales revenue declined 1.2% yoy to RMB26bn. For the first two months of 2013, management believes that SSSg has recovered significantly. It expects to maintain the current sales trend during 2013. Players expec
11、ts CE market to recover in 2013 According to AVC, a CE consulting company, there was strong demand for TVs (+45% yoy) and refrigerators (+25% yoy) during the CNY promotion period. Gome also experienced a recovery during the CNY. To recap, Gome plans to open 100 stores in the tier-2 market. In the ti
12、er-1 market, it plans to close 20-50 stores to upgrade operational efficiency, and open the same number of stores in other areas. Gome expects a 5% 4 March 2013 Asia Consumer store profitability a key risk We do not value Gomes online operation as it is in the investment stage. Our DCF yields HK$0.8
13、9/share, implying 16.1x 2013E PE based on the traditional business 26.4x including losses from the internet operations. Key downside risk: failure to improve store profitability and corporate governance. Key upside risk: better-than- expected integration of online and offline operations. Please refe
14、r to full report: http:/ Anne Ling Esprit Budget has changed, CEO tells press (0330.HK, HK$10.08, Hold) Esprits management held several interviews with the press recently; the articles were published in todays local newspaper. The following is a summary: New CEO, Jose Martinez, told the press that t
15、he budget of HK$18.5bn for the companys Transformation Plan no longer existed, and that he was fine-turning the budget so as to cater to current development needs. Although most of the transformation details are still relevant, the CEO said he is unlikely to spend as much on marketing and advertisin
16、g. Mr. Martinez believes Esprits product quality has improved compared to the past six months; he is confident the company is heading in the right direction, but he added it would take time to turn sales performance back to a growth phase. Management is seeing improved sales each month with new bran
17、d positioning, new products launched, as well as improved relationship with distributors. The budget for the companys transformation plan will be linked to sales performance. An increase in cost with no corresponding increase in sales the last time resulted in the company having to tap the equity ma
18、rket; it is determined not to repeat this mistake to protect the interests of shareholders. In addition, the CEO said that transformation is a continuous process and should not be viewed in terms of a timeline (i.e. four years as previously stated; a timeline, generally, is indicated to answer inves
19、tor queries). Management also noted that Mr. Michael Ying is an investor but does not demand a seat on the Board. Source 4 March 2013, HKEJ, HKET Figure 2: Esprits Transformation Plan OldOldNewNew Time Horizon FY2014/15No timeline Plan Focus on marketing, with HK$6.80bn in brand marketing (30% in Ch
20、ina) and 3bn in store revamp Focus on product development as brand positioning is done Estimated budget HK$18.5bn (HK$7bn in capex and 11.5bn in opex) Linked with sales performance. Monitoring GPM performance Source: Deutsche Bank, HKEJ, HKET 4 March 2013 Asia Consumer 2) 2m to Mr. Erwin Steve Huang
21、 (Deputy Chairman and Chief Corporate Development Officer); 3) 2m to Mr. Lai Tsz Mo, Lawrence (CFO and Company Secretary); 4) 1.21m to Mr. Tse Tat Fung, Tommy (Deputy CEO); and, 5) 0.8m to Mr. Tse Sui Luen (Founder). Source: 1 March 2013, company announcement Shenguan Supplemental agreement related
22、to LJK sale and purchase agreement (0829.HK, HKD3.95, NR) Wuzhou Shenguan, a wholly-owned subsidiary of the company, entered into a supplemental agreement with LJK, under which Exceltech Global Investment Pte Ltd., can procure collagen sausage casing directly from Wuzhou Shenguan. Exceltech is a com
23、pany incorporated in HK, wholly-owned by Mr. Low Jee Keong, a non-executive director of Shenguan. The supplemental agreement is in relation to the LJK sale and purchase agreement dated 2 December 2011, regarding sales of Shenguans products for a term of three years from 1 January 2012 to 31 December
24、 2014, with annual caps of US$1.37m, US$2.06m and US$3.09m for the three years, respectively. LJK, a company incorporated in Malaysia, is 80% owned by Mr. Low Jee Keong. The supplemental agreement added Exceltech as one of the purchasers to the LJK sale and purchase agreement, as Mr. Low plans to di
25、versify his business to Southeast Asia through Exceltech. Source: 1 March 2013, company announcement Christine Retirement of CEO (1210.HK, HKD1.27, NR) The company announced that Ms. Zhu Xiuping will reach retirement age soon and cease to be CEO from 28 February 2013. During the transition period, M
26、r. Tien-An Lo 4 March 2013 Asia Consumer lower CPO prices dragged (GAGR.SI, SGD 0.65, Buy) FY12 earnings missed Golden Agri (GAR) reported FY12 core net profit (ex biological gains, FX and EI) of US$404m -29% YoY. The earnings were 13% and 15% below DBe and consensus estimates respectively. While FF
27、B and CPO production grew 14% and 10% respectively, earnings were lower due to 1) lower CPO price (-11% YoY), 2) losses in its China ops due to higher soybean feedstock costs and inability to pass-through the cost increase due to the Chinese governments control of cooking oil prices to reign in food
28、 inflation and 3) higher inventory levels and tight logistics. The effective tax rate of 32% in FY12 was higher due to losses in China which does not offset the 25% tax rate on its Indonesian ops. on consolidated reporting basis. As expected, the company paid a final dividend of S$0.59/share, implyi
29、ng a total P/O ratio of 30%, similar to previous years. Balance sheet remains healthy at 0.14x. Mgmt expect a better 2H13 Mgmt expects CPO price of US$900-1,000 with a stronger 2H and expects downstream margins of 3-5% (from negative previously). Projected capex of US$550m in 2013 of which US$320m a
30、llocated for downstream, US$200m upstream developing e-commerce LOreal announced on 28 February that sales grew 12.4% yoy to RMB12bn in China in 2012. Alexis Perakis-Valat, CEO of LOreal China, said it was LOreals 12 th year of double-digit growth rate in China. LOreal will work to keep the growth r
31、ate higher than 10% in 2013, and will speed up development in the e-commerce sector in order to double online sales this year. At present, online sales contribute 3-4% of LOreals total sales in China, but are growing very fast, explained Bao Yanyue, General Manager of the LOreal brand. 4 March 2013
32、Asia Consumer Bohua said the more important thing is to develop the domestic dairy industry and cultivate own brands. Source: 4 March 2013, Hexun China F however, most of it is through distributors. From 2012, many countries including the US, New Zealand, Australia, Germany and Netherlands have issu
33、ed policies limiting milk powder purchase. On 1 March, the HK government regulated that one person can only purchase two cans of baby milk powder. This policy will make Chinese consumers more reliant on e-shopping. Source: 2 March 2013, Xinhuanet 4 March 2013 Asia Consumer as a result, the recommend
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