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Perspective Of China'S Consumer Industry: Women'S Shoes And Department Stores Are Strong In Defense.

2011/10/8 14:25:00 50

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Profit Forecast Gross Profit Rate Price Earnings Ratio

In 2012, we reiterated the "leading" rating to the consumer industry in China / Hongkong.

Nonetheless, we are more cautious about the industry's prospects, due to the intensification of macroeconomic resistance, the slowdown of China's consumption growth prospects and the weakening of the growth of the consumer sector.

In addition, we believe that increased competition and market integration will deepen the polarization effect of the industry.

These factors make us hold different views on different branch businesses in 2012.

We cut the 2012 annual forecast of earnings forecasts 3-8% and cut 2013 of the year.

Profit forecast

After 2-8%, our current 2012 profit forecast is lower than the market forecast 2-28%, and the 2013 profit forecast is lower than the market forecast 5-36%.

We believe that investors should seek shares with strong sales performance, high predictability and better market pressure.

We recommend department stores and women's footwear companies, because the same store sales grew steadily, brand strength increased, and the growth momentum continued to improve.

Under the pressure of gross margins and excessive expansion of industries, we do not like the sports apparel industry.

We prefer BELLE, Golden Eagle and RIFO international, and we do not recommend doctor frog.

Other recommended shares include Yintai, Sasa, Li XinDa and international Taifeng.

We maintain prudent views on Parkson, Huarun group, Anta, Daphne and XTEP.

We recommend women's shoes company and department store industry. We believe that the two industry sectors are better in two aspects of business growth and defense in the same store sales growth, new store expansion and pricing ability and market share increase.

We expect that the average net profit growth of the industry in 2012/13 will be 19%/20% (the forecast of net profit growth forecast in 2011 is 28%). Coupled with the foreseeable predictability of the industry business model, we believe that the valuation of these two sectors should have a higher premium.

We like BELLE, Li Fu International, Jin Ying, Li XinDa and Yintai. We have a neutral view of Parkson and Daphne.

Sports apparel industry is not recommended in 12 years.

We do not like the sports apparel industry.

We maintain that the sport apparel industry was not recommended in 2012, mainly because the industry's earnings outlook is still lower than expected.

We believe that the main negative catalysts that may arise in 2012 include overstock or further deterioration of the industry, the expansion of retail channels and the increase in the discount of brands to distributors.

Gross profit margin

Pressure.

In view of this, we believe that the prospect of the sports apparel industry is still uncertain as predictability is low and negative news continues.

Give Anta and XTEP "neutral" rating.

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The consumer industry is leading the market.

Industry valuation.

Industry's major consumer stocks 2012 forecast

P / E ratio

It's 14.3 times.

Based on the market's concern about the slowdown in industry growth, coupled with the risk appetite of investors, the recent sharp adjustment in share prices has narrowed the trading gap (premium) relative to other industries.

Based on the declining earnings outlook and the challenge of the external macro-economic environment, we should take a prudent view of the growth prospects of the industry or restrict the possibility of the upward valuation of the industry.

However, the consumption theme of China will support the industry to achieve sustainable growth, and the consumer industry will continue to lead the market.