CHINA FEIHE(06186.HK):INFANT MILK FORMULA MARKET LEADER WITH RESILIENT OPERATIONAL PERFORMANCE AMIDST CHALLENGING TIMES MAINTAIN "BUY"
CHINA FEIHE(06186.HK):INFANT MILK FORMULA MARKET LEADER WITH RESILIENT OPERATIONAL PERFORMANCE AMIDST CHALLENGING TIMES MAINTAIN "BUY"
Maintain "Buy" rating but cut TP to HK$5.90. We revise down our forecasts for China Feihe's (or the "Company") 2023-2025 sales revenue to RMB21,831 mn (-9.2%)/ RMB22,932 mn (-12.5%)/ RMB23,795 mn (-9.9%), respectively. We revise down our forecasts for its 2023-2025 EPS to RMB0.531 (-24.6%)/ RMB0.551 (-30.8%)/ RMB0.573 (-25.0%), respectively. At this stage, we think that the pessimism about demographics (as a structural headwind) has been priced in to a large degree. Going forward, China's infant milk formula industry is more likely to bottom out in 2024-2025. Although the market will continue to see intense competition, we are optimistic that China Feihe could consolidate market share and deliver profitable growth in 2024-2025, driven by 1) stronger presence in high-end segment, and 2) more efficient S&D model. Our new TP of HK$5.90 is based on 10.0x 2024F PER, implying a 22% upside.
維持 “買入” 評級，但將目標價下調至5.90港元。我們將對中國飛鶴（或 “公司”）2023-2025年銷售收入的預測分別下調至人民幣2.18.31億元（-9.2％）/2.29億元人民幣（-12.5％）/人民幣237.95億元（-9.9％）。我們將對其2023-2025年每股收益的預測分別下調至人民幣0.531元（-24.6％）/人民幣0.551元（-30.8％）/人民幣0.573元（-25.0％）。在現階段，我們認爲對人口統計的悲觀情緒（作爲結構性阻力）已在很大程度上被考慮在內。展望未來，中國的嬰兒配方奶粉行業更有可能在2024-2025年觸底。儘管市場將繼續面臨激烈的競爭，但我們樂觀地認爲，中國飛鶴能夠在2024-2025年鞏固市場份額並實現盈利增長，這得益於1) 在高端細分市場佔有率的提高，以及2) 更高效的研發模式。我們的新目標價爲5.90港元，基於每股收益10.0倍2024華氏度，這意味着上漲幅度爲22％。
Offline infant milk formula market continued to fall during 3Q2023 based on the Nielsen data and our channel check. Specifically, volume/ ASP saw high-teen/ low-single-digit percentage yoy decrease for the overall infant milk formula market in China. Mom & baby channel slightly outperformed modern trade channel in 3Q2023. By comparison, online infant milk formula sales saw mid-to-high single-digit percentage yoy decrease in 3Q2023 on Tmall/ Taobao and JD combined. In terms of online trade, high-end brands (including Feihe, Aptamil, a2 and Yili) recorded positive yoy growth amidst structural headwind. We expect that childbirth in China may see marginal rebound in 2024-2025 as short-term birth rate drop is approaching a historic level and the introduction of more favorable government policies cannot be ruled out. Investor sentiment in China's infant milk formula industry will then see marginal improvement.
根據尼爾森的數據和我們的渠道調查，在 3Q2023 期間，線下嬰兒配方奶粉市場繼續下跌。具體而言，中國整個嬰兒配方奶粉市場的銷量/ASP同比下降了高位數/低個位數百分比。在 3Q2023 中，媽媽和寶寶頻道的表現略高於現代貿易渠道。相比之下，在天貓/淘寶和京東的在線嬰兒配方奶粉銷售總額中，3Q2023 同比下降了中到高的個位數百分比。在線貿易方面，高端品牌（包括飛鶴、Aptamil、a2和伊利）在結構性逆風中實現同比正增長。我們預計，隨着短期出生率下降已接近歷史水平，也不能排除出臺更有利的政府政策的可能性，中國的分娩在2024-2025年可能會出現小幅反彈。然後，中國嬰兒配方奶行業的投資者情緒將略有改善。
It is visible that China Feihe will keep its leadership position. Based on the Nielsen data, China Feihe's market share remained flat at 23% in 1-9M2023, followed by Yili (14%) and Junlebao (9%), among domestic infant milk formula brands, in terms of offline sales value. Leading local brands further captured market share from both MNCs and smaller brands, in line with our expectation. Price competition has eased in the past quarter. For China Feihe, destocking/ sales turnover has been smooth and its pricing system is to stabilize. Coupled with continuous investment in brand building/ A&P activities, we forecast that its super-premium Astrobaby/ premium series will deliver 6%/ 2% yoy growth in 2024, still outpacing the industry average (despite a downward revision).
顯而易見，中國飛鶴將保持其領導地位。根據尼爾森的數據，就線下銷售價值而言，中國飛鶴在 1-9M2023 中的市場份額持平，爲23％，其次是國內嬰兒配方奶品牌中的伊利（14％）和君樂寶（9％）。領先的本土品牌進一步從跨國公司和小型品牌手中奪取了市場份額，這符合我們的預期。在過去的一個季度中，價格競爭有所緩解。對於中國飛鶴來說，去庫存/銷售週轉順利，其定價體系將趨於穩定。再加上對品牌建設/A＆P活動的持續投資，我們預測其超高端Astrobaby/Premium系列將在2024年實現6％/2％的同比增長，仍超過行業平均水平（儘管有所向下修正）。
Catalysts: 1) Potential "Year of the Dragon" baby boom in 2024; 2) expansion of high-end infant milk formula sales may exceed expectations; and 3) China may step up policy coordination to boost fertility rates.
催化劑：1）2024年潛在的 “龍年” 嬰兒潮；2）高端嬰兒配方奶粉銷售的擴張可能超出預期；3）中國可能加強政策協調以提高生育率。
Risks: 1) slower-than-expected demand recovery; 2) food safety issues; and 3) intensified market competition.
風險：1）需求復甦低於預期；2）食品安全問題；3）市場競爭加劇。
譯文內容由第三人軟體翻譯。