WANT WANT CHINA(151.HK):THE SWEET COMBO OF DIFFERENTIATED STRATEGY AND STEADY CASH FLOW
WANT WANT CHINA(151.HK):THE SWEET COMBO OF DIFFERENTIATED STRATEGY AND STEADY CASH FLOW
Want Want China
中國旺旺
The sweet combo of differentiated strategy and steady cash flow
差異化策略和穩健的現金流的完美結合
Despite the headwinds in consumer market, WWC's FY24 results were in-line with our estimates, thanks to its strong cost control initiatives and lower raw material cost. We believe the results have shown WWC's products are more counter-cyclical and resilient than most dairy peers. In the coming fiscal year, we expect WWC would continue to benefit from its inventory of low-cost milk powder. Hence, we expect GPM would be even higher, supporting earnings growth. We reiterate BUY as we like WWC's commitment to shareholder return, and its defensive nature. With an expected dividend yield of 7% and a ROE of 26% in FY25, we believe the current valuation at 11x FY25 P/E attractive.
儘管消費市場面臨挑戰，中國旺旺的FY24年度業績符合我們的預期，得益於其強大的成本控制措施和較低的原材料成本。我們認爲，該結果表明中國旺旺的產品比大多數乳製品同行更具逆週期性和彈性。在未來的財年裏，我們預計中國旺旺將繼續受益於其低成本奶粉庫存。因此，我們預計GPM將更高，支持盈利增長。我們重申買入，因爲我們喜歡中國旺旺對股東回報的承諾，以及其防禦性質。隨着FY25年度紅利收益率預期爲7%，ROE預期爲26%，我們認爲當前的11倍FY25市盈率估值相當有吸引力。
Key Factors for Rating
評級的關鍵因素
FY24 earnings supported by lower COGS. While full year revenue grew only by 2.9% YoY to RMB23.6bn as 2HFY24 revenue was only up 1.8% YoY, WWC's full year net profit was up 18% YoY to RMB39.9bn, in-line with our expectations. The key drivers for such earnings growth were: (1) a 2.7ppt YoY improvement of GPM to 46.6%, thanks to high S.D. decline of milk powder price, and (2) strong control of distribution cost, being almost flattish at RMB3.02bn, accounting for 12.8% of FY24 revenue (FY23: 13.2%).
FY24年度的營收僅同比增長2.9%達236億元，由於2HFY24年的營收僅同比增長1.8%，但中國旺旺的年度淨利潤同比增長18%達399億元，符合我們的預期。這種盈利增長的主要驅動因素是：（1）GPM同比提高2.7個百分點至46.6%，得益於奶粉價格大幅下降，（2）強大的配送成本控制，幾乎與FY23年持平，爲30.2億元，佔FY24年度營業收入的12.8%（FY23：13.2%）。
Higher GPM expected as lower cost of milk powder being locked-in. Mgmt. expected that GPM for FY25E is likely to remain stable or even go higher, as they have already locked in the price of New Zealand milk powder, with a volume sufficient for the sales of coming 2-3 quarters. Given that milk powder accounted for c.20% of COGS, and the powder cost for WWC is expected to decline by mid-to-high S.D. YoY, we expect this should support WWC's GPM to hit to 47.2% in FY25E, a four-year high.
由於已經鎖定了新西蘭奶粉的價格，並擁有足夠的銷售量來足以銷售未來2-3個季度，預計FY25的GPM會保持穩定甚至會更高。由於奶粉佔COGS約20%，WWC的粉末成本預計會同比下降中高S.D.，我們預計這將支持WWC的GPM在FY25年達到47.2％，達到四年高峰。
Reaping rewards on differentiated products. WWC's star product Hot-kid Milk achieved high S.D. revenue growth in FY24, outperforming many dairy categories. We believe this could be attributed to double-digit growth of canned Hot-kid Milk, as this product, with a much longer shelf life, could be distributed in vendor machines and other channels more effectively. Moreover, even with big events such as Olympics, WWC remains committed to its differentiated low cost promotion, which could generate strong return and cash flow to support dividends in FY25E, and we expect the payout ratio could be around 80%.
在差異化產品上獲得收益。中國旺旺的明星產品——熱賣兒童奶在FY24年實現了高幅度營收增長，表現優於許多乳製品品類。我們認爲，這可能歸因於罐裝熱賣兒童奶的雙位數增長，因爲這種產品具有更長的保質期，可以更有效地在售貨機和其他渠道進行分銷。此外，即使在像奧運會這樣的大事件中，中國旺旺仍致力於其差異化的低成本推廣，這可以產生強勁的回報和現金流來支持FY25年度的股利，我們預計其支付比率可能約爲80%。
Overseas market being a highlight. WWC's overseas market achieved mid- to-high teens growth in FY24, and its mgmt. expected this momentum to remain strong due to penetration into mainstream retail outlets. While mgmt. did not rule out the possibility of M&A in overseas market, we believe the key highlight would continue to be its organic operations in Vietnam, as its products are appealing to overseas Chinese community, as well as clients for OEM manufacturing.
境外市場是一大亮點。中國旺旺的境外市場在FY24年實現了中到高青少年增長，其管理層預計這種勢頭將因滲透到主流零售渠道而保持強勁。雖然管理層並沒有排除在境外市場進行M&A的可能性，但我們認爲重點亮點將繼續是其在越南的有機運營，因爲該公司的產品吸引了海外華人社區以及OEM製造商的客戶。
Key Risks for Rating
評級的主要風險
Major downside risks to our view include: (1) weaker-than-expected sales due to weak economy; (2) market share decline being quicker than market expected; and (3) a surprise sharp increase in raw material costs.
我們觀點的主要下行風險包括：（1）由於經濟疲軟而銷量不及預期;（2）市場份額下降速度快於市場預期;（3）原材料成本意外大幅上漲。
Valuation
估值
We slightly revise up our EPS forecast by 2-3% after the results, and our TP (unchanged at 15.5x FY25 P/E) is slightly lifted to HK$6.2.
結果公佈後，我們稍微調高了EPS預測2-3％，並且我們的TP（FY25市盈率不變爲15.5倍）略有提升至6.2港元。
譯文內容由第三人軟體翻譯。