[Brokers Focus] Haitong International says consumption performance of dairy products is superior to other food and beverage sub-industries

金吾資訊 ·  10/20/2023 15:48

Jinwu Financial News | According to the Haitong International Research and Development Report, the macroeconomic environment depends on continuous consumption growth, and consumption of dairy products has continued to grow continuously over the past ten years, which is significantly better than other food and beverage sub-industries.

According to the bank, consumer health awareness has increased, and room temperature white milk has ushered in a recovery growth; with the widespread application of superbus technology and the continuous improvement of cold chain logistics, pasteurized milk is on the rise, enterprises accelerate layout and investment, and the market will usher in an increase in both supply and demand; yogurt products as a whole are under slight pressure, but both room temperature and low temperature products continue to innovate, and it is expected that the share of infant formula will gradually rise due to the continuous decline in newborns, and the share of infant formula has continued to rise in squeezed growth due to the continuous decline in newborns in recent years, but the country's favorable population policy continues to rise Reinvigorate the industry's potential.

The bank added that in the past two years, the growth of the dairy industry has been slowing down, some categories have even experienced negative growth, and the stock prices of upstream and downstream listed companies are sluggish, putting great pressure on industry insiders and investment institutions and dampening their confidence. The reasons behind this are complex, including the economic slowdown, the international situation, and the imbalance between supply and demand. At the same time, we also need to see a long-term increase in demand for dairy products, a continuous increase in the concentration of the dairy industry, higher and higher barriers to industry entry, and a gradual increase in the competitive strength and profitability of dairy companies. It is currently at the bottom of the cycle of raw milk prices, revenue growth, and company valuations. Looking ahead for 3-5 years, whether it is downstream manufacturing enterprises, such as Mengniu (02319), Erie, Feihe (06186), etc., or upstream breeding enterprises, such as Hyundai Animal Husbandry (01117) and Youran Animal Husbandry (09858), etc., there is considerable room for improvement in investment value.

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