SINGAPORE (Oct 11): Daiwa Capital Markets is staying “neutral” on China’s consumer sector in a flash note published today by analyst Anson Chan.
The consensus of 30 investors in Malaysia and Singapore Chan met recently is that valuations of stocks of China staples remained stretched but are interested in the stocks of China sportswears companies, notes Chan.
Most investors cite the slowdown in revenue growth in many staple sub-segments. Points of discussion included Tingyi’s (now trading at HK$9.64) recent rally and insight into its upcoming 3Q results. Chan expects a mild recovery in the company’s beverage sales of mainly bottled water from a low base in 3Q15, but sees an increase in palm oil costs to further compress Tingyi’s noodle margins in 2H16 to 2017.