Embed Size (px)
Citation preview
See the last page for disclaimer Page 1 of 9
Eq
uit
y R
ese
arc
h
Eq
uit
y R
ese
arc
h R
ep
ort
证 券
研 究
报 告
Co
mp
an
y R
ep
ort
股
票
研
究
公
司
报
告
证
券
研
究
报
告
[Tab
le_I
nfo1
]
消
费
行
业
-
食
品
饮
料
Co
ns
um
er
Sec
tor-
Fo
od
& B
ev
era
ge
[Tab
le_I
nfo2
]
维
他
奶
国
际
Vit
as
oy
In
tern
ati
on
al
(00
34
5 H
K)
[Table_Title] Company Report: Vitasoy International (00345 HK)
Barney Wu 吴宇扬
(86755) 2397 6680
公司报告： 维他奶国际 (00345 HK) [email protected]
22 November 2018
[Table_Summary] Growth Outperformed; A White Horse in the Beverage Industry 增速一骑绝尘，饮料行业里的大白马 Vitasoy’s 1HFY2019 results greatly beat expectations. The Company’s
1HFY19 revenue was up 22.0% YoY to HKD4,448 million, mainly driven by
robust growth of mainland China business, which surged 32.9% YoY to
HKD2,992 million. Meanwhile, the Company’s sales in Hong Kong operations
increased 4.0% YoY, better than last year. Attributable to improving
manufacturing efficiency and favorable raw materials price, the Company’s
1HFY19 gross margin improved 1.4 ppt YoY to 54.1%. Vitasoy’s 1HFY19
shareholders’ profit recorded HKD518 million, up 30.4% YoY, the strongest
growth rate in recent years.
A white horse in the beverage industry. The Company's sales in mainland
achieved much higher growth than the industry, with continuous expansion in
regions and channels. Vitasoy maintained a leading position in the online
market with sustainable high growth. The Company re-launched its "Health
Plus" series to fight within the high-end soymilk market, but we are concerned
with its high pricing. Vitasoy’s capacity utilization rate has reached quite a
high level, resulting in lower unit production cost. Its existing factories still
have space for more production lines before Dongguan factory commences.
We believe that the penetration of Vita Lemon Tea is far from saturated,
which can still drive Vitasoy's high growth. Due to the Company's unique
brand culture and differentiated product positioning, new entrants in the
soymilk market pose less threat than expected. Since our last report,
Vitasoy's share price has surged 21.5%. We still have confidence on the
Company's long-term growth. Therefore we maintain Vitasoy’s rating at
"Accumulate" and raise TP to HK$32.00, which represents 42.8x FY2019
PER, 37.6x FY2020 PER and 33.4x FY2021 PER.
维他奶 2019 财年上半年业绩远好于预期。公司 2019 财年上半年收入同比增长 22.0%至
44.48 亿港币，主要因大陆业务强劲增长所驱动，其大幅增长 32.9%至 29.92 亿港币。同
时公司香港业务的销售收入同比增长 4.0%，较去年显著加快。由于生产效率的提升和原材
料价格利好，公司 2019 财年上半年毛利率同比改善 1.4 个百分点至 54.1%。维他奶 2019
财年上半年股东净利为 5.18 亿港币，较去年同期增长 30.4%，近年来最强。
饮料行业里的大白马。随着持续不断的扩张进入更多的区域以及渠道，公司在大陆的销售
取得了比行业快得多的增速。维他奶维持了其在线上市场的领导地位，并有着持续的高增
长。为了争夺高端豆奶市场，公司重新推出“健康+”系列，但我们对其超高定价有所忧
虑。维他奶的产能利用率达到了相当高的水平，导致较低的单位生产成本。在东莞工厂投
产前，其现有工厂仍然有空间添加更多的生产线。
我们认为维他柠檬茶渗透率距离饱和仍有相当距离，其仍然能支撑维他奶的高增长。因为
公司独特的品牌文化和差异化的产品定位，豆奶市场新进入者展现出弱于预期的威胁。自
我们上次报告发出之后，维他奶股价上涨 21.5%。我们对于公司长期增长仍然有信心。因
此我们维持维他奶的评级为“收集”，并将其目标价提高至 32.00 港元，相当于 42.8 倍 2019
财年市盈率，37.6 倍 2020 财年市盈率和 33.4 倍 2021 财年市盈率。
[Table_Rank] Rating: Accumulate
Maintained
评级： 收集 (维持)
[Table_Price] 6-18m TP 目标价: HK$32.00
Revised from 原目标价: HK$27.00
Share price 股价: HK$29.600
Stock performance
股价表现
[Table_QuotePic]
[Table_PriceChange] Change in Share Price
股价变动
1 M
1 个月
3 M
3 个月
1 Y
1 年
Abs. % 绝对变动 %
14.3 14.9 57.4
Rel. % to HS Index 相对恒指变动 %
14.8 21.8 70.7
Avg. Share price(HK$) 平均股价（港元）
26.1 25.7 23.2
Source: Bloomberg, Guotai Junan International.
[Table_Profit] Year End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE
年结 收入 股东净利 每股净利 每股净利变动 市盈率 每股净资产 市净率 每股股息 股息率 净资产收益率
03/31 (HK$ m) (HK$ m) (HK$) (△ %) (x) (HK$) (x) (HK$) (%) (%)
2017A 5,406 618 0.589 15.7 50.3 2.353 12.6 0.351 1.2 26.5
2018A 6,465 586 0.555 (5.8) 53.3 2.757 10.7 0.352 1.2 21.8
2019F 7,608 792 0.747 34.6 39.6 3.084 9.6 0.448 1.5 25.6
2020F 8,634 902 0.850 13.8 34.8 3.451 8.6 0.510 1.7 26.0
2021F 9,739 1,017 0.959 12.8 30.9 3.867 7.7 0.575 1.9 26.2
[Table_BaseData] Shares in issue (m) 总股数 (m) 1,061.1 Major shareholder 大股东 Lo family 38.8%
Market cap. (HK$ m) 市值 (HK$ m) 31,408.6 Free float (%) 自由流通比率 (%) 37.6
3 month average vol. 3 个月平均成交股数 (‘000) 1,721.3 FY19 Net gearing (%) FY19 净负债/股东资金 (%) Net cash
52 Weeks high/low (HK$) 52 周高/低 (HK$) 29.800 / 18.200 FY19 Est. NAV (HK$) FY19 每股估值（港元） 32.5
Source: the Company, Guotai Junan International.
(30.0)
(20.0)
(10.0)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Nov-17 Feb-18 May-18 Aug-18 Nov-18
% of return
HSI Vitasoy
Co
mp
an
y R
ep
ort
See the last page for disclaimer Page 2 of 9
[Table_RightMar1]
22
No
ve
mb
er
20
18
[Table_RightMar2]
Vita
so
y I
nte
rna
tio
na
l 维
他奶
国际
(0
03
45
HK
)
[Table_PageHeader] Vitasoy International (00345 HK)
Vitasoy’s 1HFY2019 Interim Results Review
Mainland business maintained strong growth. Vitasoy’s 1HFY19 results were better than market consensus and our
expectation. The Company’s 1HFY19 revenue was up 22.0% YoY to HKD4,448 million, mainly driven by robust growth of
mainland China business. In 1HFY19, Vitasoy’s sales in mainland China surged 32.9% YoY to HKD2,992 million, on track with
last year’s high growth rate. The sales contribution from mainland business further expanded, up from 61.8% in 1HFY18 to
67.3% in 1HFY19. Meanwhile, the Company’s sales in Hong Kong operations increased 4.0% YoY, better than last year.
Vitasoy’s Australia and Singapore business maintained steady growth, up 4.8% YoY and 9.2% YoY, respectively.
Gross margin recovered and profitability of mainland business improved. Attributable to improving manufacturing
efficiency driven by higher volume and favorable raw materials price, the Company’s 1HFY19 gross margin improved 1.4 ppt
YoY to 54.1%. Manufacturing efficiency improvement contributed around 70% of gross margin gains. Due to investment in
brand equity program, expansion of sales team in mainland China and higher distribution costs, Vitasoy’s selling expenses to
sales ratio rose 2.1 ppt YoY to 27.3%. Nevertheless, thanks to scale affect and productivity gains, Vitasoy's 1HFY2019
segment profit margin in mainland China expanded 1.2 ppt YoY. In 1HFY19, Vitasoy’s shareholders’ profit recorded HKD518
million, up 30.4% YoY, the strongest growth rate in recent years.
Table-1: Vitasoy’s Results Review
Income Statement
HK$ million 1HFY2018 1HFY2019 YoY FY2017 FY2018 YoY
Turnover 3,646 4,448 22.0% 5,406 6,465 19.6%
Cost of sales (1,724) (2,040) 18.3% (2,533) (3,045) 20.2%
Gross profit 1,922 2,408 25.3% 2,873 3,420 19.0%
Other revenue 10 18 75.4% 35 28 -19.7%
Net gain on disposal 0 0
190 0
Selling expenses (920) (1,215) 32.1% (1,492) (1,729) 15.9%
Administrative expenses (255) (309) 21.0% (488) (559) 14.6%
Other operation expenses (188) (188) -0.5% (270) (337) 24.6%
Profit from operations 568 714 25.6% 848 822 -3.0%
Finance costs (1) (1) -1.3% (4) (2) -54.4%
Share of losses of joint venture (10) (9)
(1) (18)
Profit before taxation 557 703 26.2% 844 803 -4.9%
Income tax (130) (153) 18.1% (190) (161) -15.6%
Profit for the year 427 550 28.6% 653 642 -1.7%
Non-controlling interests 30 32 5.1% 35 56 61.2%
Shareholders’ profit 397 518 30.4% 618 586 -5.3%
Adjusted operating profit
661 822 24.3%
Adjusted shareholders’ profit*
516 586 13.5%
Gross margin 52.7% 54.1% 1.4 ppt 53.2% 52.9% -0.3 ppt
Operating margin 15.6% 16.0% 0.5 ppt -1.4% -0.9% 0.5 ppt
Adjusted operating margin
12.2% 12.7% 0.5 ppt
Effective tax rate 23.3% 21.8% -1.5 ppt 22.6% 20.0% -2.5 ppt
Reported net margin 10.9% 11.6% 0.8 ppt 11.4% 9.1% -2.4 ppt
Adjusted net margin 9.5% 9.1% -0.5 ppt Source: the Company. Note: Excluding the one-off gain of the North American divestiture in FY2017.
Co
mp
an
y R
ep
ort
See the last page for disclaimer Page 3 of 9
[Table_RightMar1]
22
No
ve
mb
er
20
18
[Table_RightMar2]
Vita
so
y I
nte
rna
tio
na
l 维
他奶
国际
(0
03
45
HK
)
[Table_PageHeader] Vitasoy International (00345 HK)
Table-2: Vitasoy’s Segmental Results Breakdown
Segment Revenue
HK$ million 1HFY18 1HFY19 YoY FY2017 FY2018 YoY
Turnover
Hong Kong/Macau 1,094 1,138 4.0% 2,168 2,159 -0.4%
Mainland China 2,252 2,992 32.9% 2,666 3,700 38.8%
Australia/New Zealand 251 263 4.8% 472 502 6.3%
Singapore 50 55 9.2% 100 104 3.3%
Total 3,646 4,448 22.0% 5,406 6,465 19.6%
Segment profit
Hong Kong/Macau 184 194 5.4% 381 352 -7.6%
Mainland China 398 565 42.0% 317 542 71.0%
Australia/New Zealand 49 45 -7.6% 87 95 8.5%
Singapore 4 1 -78.3% 12 7 -36.4%
Total 635 805 26.8% 797 996 25.0%
Segment margin
Hong Kong/Macau 16.8% 17.0% 0.2 ppt 17.6% 16.3% -1.3 ppt
Mainland China 17.7% 18.9% 1.2 ppt 11.9% 14.7% 2.8 ppt
Australia/New Zealand 19.6% 17.3% -2.3 ppt 18.5% 18.9% 0.4 ppt
Singapore 8.3% 1.7% -6.7 ppt 11.5% 7.1% -4.4 ppt
Total 17.4% 18.1% 0.7 ppt 14.7% 15.4% 0.7 ppt Source: the Company.
Mainland China Business Review and Outlook
Vitasoy achieved much better results than the industry. Affected by the sluggish macro economy environment and retail
sales, beverage sales growth in China witnessed notable deceleration in 3Q18 compared to 1H18. Consumption diversification
has been the major trend in the beverage industry, as high-end and low-end products both showed ups and downs. Due to
Vitasoy's low penetration and sustainable popularity, the Company achieved much higher growth than the market with
continuous expansion in regions and channels. The soy milk market has become more intense as more entrants enter with
numerous diversified products, but the Company's soy milk still reported steady growth. Vita Lemon Tea has strengthened its
position in the lemon tea market, and the category even commanded market share from other beverage categories. We expect
that its sales growth in mainland may slow down in 2HFY2019, affected by sluggish industry performance and increasingly high
base.
Figure-1: Retail Sales Growth of Beverages above
Designated Size
Figure-2: Output Growth of Beverages in China
Source: National Bureau of Statistics in China, Guotai Junan International. Source: National Bureau of Statistics in China, Guotai Junan International.
Challenges and benefits both resulted from high capacity utilization. Since the production facility in Wuhan commenced
operation, the Company's sales in mainland market have been experienced robust growth. Vitasoy’s capacity utilization rate
has reached a quite high level. Since the new plant in Dongguan will not be put into operation until 2021, the Company may
5.0
7.0
9.0
11.0
13.0
15.0
17.0
19.0
21.0
Feb
-15
May
-15
Au
g-1
5
No
v-1
5
Feb
-16
May
-16
Au
g-1
6
No
v-1
6
Feb
-17
May
-17
Au
g-1
7
No
v-1
7
Feb
-18
May
-18
Au
g-1
8
% Retail Sales: Beverage above designated size YoY Growth
Retail Sales: Beverage above designated size: YTD YoY Growth
(15.0)
(10.0)
(5.0)
0.0
5.0
10.0
15.0
Feb
-15
May-1
5
Aug
-15
No
v-1
5
Feb
-16
May-1
6
Aug
-16
No
v-1
6
Feb
-17
May-1
7
Aug
-17
No
v-1
7
Feb
-18
May-1
8
Aug
-18
% Output: Beverage: YoY Growth
Output: Beverage: YTD YoY Growth
Co
mp
an
y R
ep
ort
See the last page for disclaimer Page 4 of 9
[Table_RightMar1]
22
No
ve
mb
er
20
18
[Table_RightMar2]
Vita
so
y I
nte
rna
tio
na
l 维
他奶
国际
(0
03
45
HK
)
[Table_PageHeader] Vitasoy International (00345 HK)
need to make the best of existing capacity over the next few years. According to the management's statement, its existing
factories still have space for more production lines and the Company has still continuously invested in capacity. Compared to
other major beverage producers, Vitasoy has the highest capacity utilization, which has lead to the lowest unit production cost.
Vitasoy maintained a leading position in the online market. The Company’s soy milk and lemon tea products both
maintained their leading positions in the online market. Most of the food & beverage sales within the online platform were
selectively and purposely purchased by loyal customers, reflecting the true sentiment of customers. In 1-10M2018, Vita Lemon
Tea increased incrementally 31.8% YoY on Alibaba’s platform, showing sustainable popularity. As the Company's distribution
network does not cover the whole nation, particularly in the north of China, E-commerce has been a good complementary
channel to fulfill customers outside its distribution network. As we expected before, Vita Lemon Tea is growing into a giant
single beverage product in China, which has potential to increase three-fold.
Figure-3: Online sales (Tmall and Taobao) of Milk
Beverages
Figure-4: Online sales (Tmall and Taobao) of RTD Tea
Source: maijia.com, Guotai Junan International. Source: maijia.com, Guotai Junan International.
Re-launched high-end soy milk. In response to the threat of new entrants in the soymilk market, the Company re-launched its
premium high nutrition "Health Plus" series in the mainland market to fight within the high-end soymilk market. As more
entrants set foot in the soymilk market, the market has become more mature, introducing high-end soymilk products. As a
result, Vitasoy has determined to reposition its Vitasoy Health Plus products with a variety of different tastes. We noticed that
the price of Health Plus tops among existing soy milk products and even exceeds high-end milk, which may weigh on its sales
volume growth.
Table-3: Mainstream Soymilk Products and High-end Milk
VITASOY Health Plus Mengniu Milk Deluxe
DouBenDou Organic Soymilk
Yili Plant Selected DouBenDou Soymilk VITASOY Soymilk
Picture
Total Price (RMB)
66.00 68.90 59.80 38.20 42.00 38.50
Quantity 250ml*12 250ml*16 250ml*16 250ml*12 250ml*15 250ml*16
Unit Price (RMB)
5.50 4.31 3.74 3.18 2.80 2.41
Protein Content
3.4g/100ml 3.6g/100ml 3.6g/100ml 3.6g/100ml 3.0g/100ml 2.0g/100ml
Source: Tmall, Guotai Junan International.
0
2,000
4,000
6,000
8,000
10,000
12,000
Nov-1
7
Dec-1
7
Jan-1
8
Feb-1
8
Mar-
18
Apr-
18
May-1
8
Jun-1
8
Jul-18
Aug-1
8
Sep-1
8
Oct-
18
Nov-1
8Vitasoy 维他奶 Daliyuan 达利园 Doubendou 豆本豆
RMB'000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Oct-18
RMB '000 Vita (维他) UPC (统一)
Master Kong (康师傅) Nongfu Spring (农夫山泉)
Co
mp
an
y R
ep
ort
See the last page for disclaimer Page 5 of 9
[Table_RightMar1]
22
No
ve
mb
er
20
18
[Table_RightMar2]
Vita
so
y I
nte
rna
tio
na
l 维
他奶
国际
(0
03
45
HK
)
[Table_PageHeader] Vitasoy International (00345 HK)
Business outside Mainland China Review and Outlook
Hong Kong sales recovered with improvement in profitability. The company's 1HFY2019 sales in Hong Kong (Hong Kong,
Macau and Exports) increased 4.0% YoY to HK$1,138 million, with a broad distribution of growth across all product lines and
main channels. Vitasoy’s segment margin in Hong Kong improved 0.2 ppt to 17.0% in FY2018. A 2-year internal investment
programme in manufacturing and logistics infrastructure is expected to lay a solid foundation for further growth, but may need
more investment in 2HFY2019. Hong Kong total retail sales growth slowed down significantly in 3Q18. The weakened retail
sales in Hong Kong may affect the Company's sales in 2HFY2019.
Figure-5: Hong Kong GDP & YoY Growth Figure-6: Hong Kong Total Retail Sales & YoY Growth
Source: Hong Kong Census and Statistics Department. Source: Hong Kong Census and Statistics Department.
Australia & New Zealand and Singapore maintained steady growth. In 1HFY2019, Vitasoy’s sales in Australia & New
Zealand grew 4.8% YoY to HK$263 million, thanks to the plant milk market’s own growth and its portfolio expansion. Its sales in
Singapore achieved 9.2% YoY growth driven by its strong position in core tofu business and accelerating growth in imported
beverage business. The segment profit margin in Singapore declined 6.7 ppt to 1.7% as the Company increased investment to
scale up operations.
Raw Material Price Analysis
Raw material prices have become favorable as packaging prices have begun to decline. As at November 21, 2018, YTD
price of soybean and sugar dropped 3.7% YoY and 16.0% YoY. The burden on raw material costs used to derive from
packaging price. As at November 21, 2018, the YTD price of PET increased 16.7% YoY, but has turned to decline since
September, down 26.9% from the highest point. Moreover, cardboard paper price started to fall month over month, down 18.3%
from the highest point. Overall, as general raw material prices have declined, they are expected to be favorable for the
Company in 2019.
Figure-7: Domestic Sugar Price YoY Figure-8: Soybean price
Source: Bloomberg. Source: Ministry of Agriculture in China.
0.8%1.0%
1.8%
3.1%
3.4%
3.1%3.1%2.9%3.0%
2.2%
3.2%
2.6%2.4%
3.1%
2.3%
1.9%
1.1%
1.8%
2.2%
3.4%
4.4%
3.9%
3.6%3.4%
4.6%
3.5%
2.9%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
0
100
200
300
400
500
600
700
800
Mar-
12
Jun
-12
Sep
-12
Dec-1
2
Mar-
13
Jun
-13
Sep
-13
Dec-1
3
Mar-
14
Jun
-14
Sep
-14
Dec-1
4
Mar-
15
Jun
-15
Sep
-15
Dec-1
5
Mar-
16
Jun
-16
Sep
-16
Dec-1
6
Mar-
17
Jun
-17
Sep
-17
Dec-1
7
Mar-
18
Jun
-18
Sep
-18
HKD billion Hong Kong GDP (Constant Prices) Hong Kong GDP YoY Growth
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
0
10
20
30
40
50
60
Jan
-14
Mar-1
4M
ay-1
4Jul-1
4S
ep
-14
No
v-1
4Jan
-15
Mar-1
5M
ay-1
5Jul-1
5S
ep
-15
No
v-1
5Jan
-16
Mar-1
6M
ay-1
6Jul-1
6S
ep
-16
No
v-1
6Jan
-17
Mar-1
7M
ay-1
7Jul-1
7S
ep
-17
No
v-1
7Jan
-18
Mar-1
8M
ay-1
8Jul-1
8S
ep
-18
HKD billion Hong Kong total retail sales: Value YoY Growth
3,900
4,400
4,900
5,400
5,900
6,400
6,900
7,400
Jan-16 Jun-16 Nov-16 Apr-17 Sep-17 Feb-18 Jul-18
Sugar Price (RMB/Tonne)
3,000
3,100
3,200
3,300
3,400
3,500
3,600
3,700
3,800
3,900
2015 2015 2015 2016 2016 2016 2017 2017 2017 2018 2018 2018
RMB./ton Soybean
Co
mp
an
y R
ep
ort
See the last page for disclaimer Page 6 of 9
[Table_RightMar1]
22
No
ve
mb
er
20
18
[Table_RightMar2]
Vita
so
y I
nte
rna
tio
na
l 维
他奶
国际
(0
03
45
HK
)
[Table_PageHeader] Vitasoy International (00345 HK)
Figure-9: PET Price Figure-10: Cardboard Paper Prices
Source: www.tbs-china.com, WIND. Source: WIND.
Earnings Forecasts Assumptions and Revisions
We have revised up our estimations in FY2019-FY2021. We have revised up our revenue forecasts for Vitasoy by 4.8%, 6.1%
and 6.8% in FY2019 -FY2021, respectively, due to the Company's strong performance in mainland. Due to declining raw
material prices and higher production efficiency, we have revised up the Company's FY2019-FY2021 gross margin by 1.2 ppt,
1.2 ppt, and 1.1 ppt, respectively. Due to investment in brand equity program, expansion of sales team in mainland China and
promotion expenses on new products, we have revised up our selling expenses ratio forecasts in FY2019-FY2021. However,
we have revised down administrative expenses ratio and other expenses ratio due to larger scale. Above all, we have revised
up EPS forecasts in FY2019-FY2021 by 20.2%, 21.8% and 22.4%, respectively.
Table-4: Earnings Estimates
HKD million NEW OLD CHANGE
FY2019F FY2020F FY2021F FY2019F FY2020F FY2021F FY2019F FY2020F FY2021F
Revenue 7,608 8,634 9,739 7,263 8,122 9,075 4.8% 6.3% 7.3%
Gross profit 4,124 4,688 5,288 3,849 4,313 4,828 7.1% 8.7% 9.5%
Operating profit 1,123 1,281 1,444 933 1,051 1,182 20.3% 21.9% 22.2%
Net profit 792 902 1,017 658 740 829 20.4% 21.9% 22.7%
EPS (HKD) 0.747 0.850 0.959 0.622 0.698 0.783 20.2% 21.8% 22.4%
Gross margin 54.2% 54.3% 54.3% 53.0% 53.1% 53.2% 1.2 ppt 1.2 ppt 1.1 ppt
Operating margin 14.8% 14.8% 14.8% 12.9% 12.9% 13.0% 1.9 ppt 1.9 ppt 1.8 ppt
Net margin 10.4% 10.4% 10.4% 9.1% 9.1% 9.1% 1.3 ppt 1.3 ppt 1.3 ppt
Source: Guotai Junan International.
Maintain "Accumulate" and raise TP to HK$32.00. We believe that penetration of Vita Lemon Tea is far from saturated,
which can still continuously drive the Company's mainland business to grow rapidly over the next few years. Because of the
Company's unique brand culture and differentiated product positioning, the new entrants in soymilk market poses less threat to
the Company than previously expected. The Company’s 1HFY2019 results have proved its high earnings growth prospects,
which has upheld its high valuation. Since our last report, Vitasoy's share price has surged 21.5%. We still have confidence on
the Company's long-term growth and profitability enhancement. Therefore we maintain Vitasoy’s rating at "Accumulate" and
raise TP to HK$32.00, which represents 42.8x FY2019 PER, 37.6x FY2020 PER and 33.4x FY2021 PER.
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
10,000
10,500
11,000
11,500
12,000
Sep-17 Dec-17 Mar-18 Jun-18 Sep-18
PET Resin Price (RMB/Tonne)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Feb-16 Jun-16 Oct-16 Feb-17Jun-17 Oct-17 Feb-18Jun-18 Oct-18
RMB/ton Cardboard: Guangdong: Jiulong (126g)
Cardboard: Jiangsu, Zhejiang: Sea Dragon (120g)
Cardboard: Jiangsu, Zhejiang: Sequoia (120g)
Cardboard: Tianjin: Sea Dragon (140g)
Co
mp
an
y R
ep
ort
See the last page for disclaimer Page 7 of 9
[Table_RightMar1]
22
No
ve
mb
er
20
18
[Table_RightMar2]
Vita
so
y I
nte
rna
tio
na
l 维
他奶
国际
(0
03
45
HK
)
[Table_PageHeader] Vitasoy International (00345 HK)
Table-5: Peers Comparison
Company Ticker $ Share Price
Market Cap
(HK$ mn)
PER (x) PBR
(x)
ROE (%) Gross Margin
(%)
Operating Margin
(%) 2018 2019 2020 2018 2018 2018 2018
China Resources
Beer Holding
291 HK HKD 28.000 90,837 39.9 30.7 25.3 4.1 10.8 36.1 8.5
China Mengniu
Dairy Co
2319 HK HKD 24.250 95,242 27.2 21.3 17.4 3.3 12.9 38.2 5.6
Tingyi (Cayman
Isln) Hldg Co
322 HK HKD 12.720 71,458 25.7 21.9 19.3 3.1 12.7 31.3 6.6
Dali Foods Group
Co Ltd
3799 HK HKD 5.950 81,480 18.8 16.4 14.3 4.8 26.7 38.9 21.1
Want Want China
Holdings Ltd
151 HK HKD 5.740 71,459 19.5 18.3 17.2 4.0 21.8 43.1 20.2
Tsingtao Brewery
Co Ltd-H
168 HK HKD 31.250 44,715 23.6 20.1 17.6 2.0 8.9 37.3 5.8
Uni-President China
Holdings
220 HK HKD 7.750 33,475 26.5 23.0 20.6 2.2 8.6 34.8 6.5
Vitasoy Intl Holdings
Ltd
345 HK HKD 29.600 31,409 39.6 34.8 30.9 9.6 25.6 54.2 14.8
China Foods Ltd 506 HK HKD 3.620 10,126 21.8 18.0 15.2 2.1 9.5 35.5 5.2
Simple Average 28.5 23.9 20.5 4.0 14.9 38.7 10.2
Weighted Average 28.0 23.2 19.9 4.0 15.7 38.2 11.1 Source: Bloomberg. Note: For those companies with financial year ended other than 12/31, their PER and PBR are adjusted to calendar year and ROE, GM as well as OM of FY19F are shown in 2018 in table for comparison.
Figure-11: PER Band of Vitasoy Figure-12: PBR Band of Vitasoy
Source: Bloomberg, Guotai Junan International. Source: Bloomberg, Guotai Junan International.
Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
0
5
10
15
20
25
30
35
40
45
Vitasoy
(x)
PER (historical) PER (current) PER (high)
PER (low) PER band
Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Vitasoy
(x)
PBR (historical) PBR (current) PBR (high)
PBR (low) PBR band
Co
mp
an
y R
ep
ort
See the last page for disclaimer Page 8 of 9
[Table_RightMar1]
22
No
ve
mb
er
20
18
[Table_RightMar2]
Vita
so
y I
nte
rna
tio
na
l 维
他奶
国际
(0
03
45
HK
)
[Table_PageHeader] Vitasoy International (00345 HK)
Financial Statements and Ratios
[Table_CompanyRatingDefinition]
[Table_IncomeStatement] Income Statement
Year end 31 Mar (HK$ m) 2017A 2018A 2019F 2020F 2021F
Total Revenue 5,406 6,465 7,608 8,634 9,739
Cost of sales (2,533) (3,045) (3,485) (3,946) (4,451)
Gross profit 2,873 3,420 4,124 4,688 5,288
Net gain on disposal of assets 190 0 0 0 0
Selling expenses (1,492) (1,729) (2,077) (2,357) (2,659)
Administrative expenses (488) (559) (571) (648) (730)
Other income and expense (270) (337) (380) (432) (487)
Operating profit 848 822 1,123 1,281 1,444
Net finance costs (4) (2) (1) (3) (3)
Share of profits from associates (1) (18) (0) 0 1
Profit before Tax 844 803 1,121 1,278 1,441
Income Tax (190) (161) (256) (291) (329)
Profit after Tax 653 642 866 987 1,113
Non-controlling Interest (35) (56) (74) (85) (96)
Shareholders' Profit / Loss 618 586 792 902 1,017
Adjusted operating profit 661 822 1,123 1,281 1,444
Adjusted shareholders' profit 516 586 792 902 1,017
Basic EPS 0.589 0.555 0.747 0.850 0.959
Adjusted EPS 0.491 0.000 0.747 0.850 0.959
[Table_CashFlowStatement] Cash Flow Statement
Year end 31 Mar (HK$ m) 2017A 2018A 2019F 2020F 2021F
PBT 844 803 1,121 1,278 1,441
DD&A 238 248 329 366 386
Change in working capital 160 177 (190) 30 31
Others (172) 46 (7) (7) (9)
Cash generated from operations 1,070 1,274 1,254 1,668 1,848
Income and interest tax paid (125) (209) (231) (302) (320)
Cash from Operating Activities 945 1,066 1,022 1,365 1,528
Investing activities
Capital expenditure (251) (421) (508) (610) (410)
Proceeds from disposal 338 0 0 0 0
Others 11 (22) 11 10 13
Cash from Investing Activities 98 (443) (498) (600) (397)
Financing activities
Loans changes (139) (180) 50 50 (50)
Dividend paid (317) (370) (374) (475) (541)
Others 4 39 (29) (38) (43)
Cash from Financing Activities (451) (511) (353) (463) (634)
Net Changes in Cash 592 111 172 302 497
Foreign exchange effect (10) 22 0 0 0
Cash at Beg of Year 271 853 985 1,157 1,459
Cash at End of Year 853 985 1,157 1,459 1,956
Source: the Company, Guotai Junan International.
[Table_BalanceSheet] Balance Sheet
Year end 31 Mar (HK$ m) 2017A 2018A 2019F 2020F 2021F
Property, plant and equipment 1,986 2,278 2,426 2,638 2,628
Others 164 244 186 195 190
Total Non-current Assets 2,150 2,522 2,612 2,833 2,818
Cash & Cash Equivalents 853 985 1,157 1,459 1,956
Inventories 582 709 833 917 1,057
Bills receivable 900 955 1,213 1,200 1,468
Others 1 11 6 6 6
Total Current Assets 2,336 2,660 3,209 3,582 4,487
Total Assets 4,487 5,182 5,821 6,415 7,304
Short-term debts 7 27 15 7 5
Bills payable 1,467 1,864 2,055 2,156 2,594
Others 39 32 29 30 33
Total Current Liabilities 1,513 1,923 2,099 2,193 2,631
Net current liabilities 823 737 1,110 1,390 1,856
Total assets less current liabilities 2,973 3,259 3,722 4,223 4,673
Long-term debts 200 0 62 120 72
Others 84 90 86 86 87
Total Non-current Liabilities 284 90 148 205 159
Total Liabilities 1,797 2,013 2,247 2,398 2,790
Share capital 774 857 857 857 857
Reserves 1,697 2,052 2,411 2,805 3,246
Total Shareholders' Equity 2,471 2,910 3,268 3,662 4,103
Minority Interest 218 259 305 355 411
Total Equity 2,690 3,169 3,574 4,017 4,514
[Table_FinancialRatio] Financial Ratios
2017A 2018A 2019F 2020F 2021F
Turnover growth (%) -2.6 19.6 17.7 13.5 12.8
Gross profit growth (%) 1.7 19.0 20.6 13.7 12.8
Operating profit growth (%) 40.6 -3.0 36.6 14.1 12.7
Adjusted operating growth(%) 4.0 24.3 36.6 14.1 12.7
Net profit growth (%) 16.5 -5.3 35.2 13.9 12.8
Adjusted net profit growth (%) 2.4 13.5 35.2 13.9 12.8
Gross margin (%) 53.2 52.9 54.2 54.3 54.3
Operating margin (%) 15.7 12.7 14.8 14.8 14.8
Adjusted Operating margin (%) 12.2 12.7 14.8 14.8 14.8
Net margin (%) 11.4 9.1 10.4 10.4 10.4
Adjusted net margin (%) 9.5 9.1 10.4 10.4 10.4
ROE (%) 26.5 21.8 25.6 26.0 26.2
ROA (%) 14.3 12.1 14.4 14.7 14.8
Inventory turnover days 37.5 36.5 37.0 37.0 37.0
Account receivable days 58.3 52.4 52.0 51.0 50.0
Account payable days 93.0 94.0 94.0 89.0 89.0
Cash conversion cycle 2.9 -5.2 -5.0 -1.0 -2.0
Current ratio (x) 154.4 138.3 152.9 163.4 170.5
Quick ratio (x) 115.9 101.4 113.2 121.5 130.4
Cash ratio (x) 56.4 51.3 55.1 66.5 74.3
Net gearing (%) Net cash Net cash Net cash Net cash Net cash
Payout ratio (%) 59.6 63.4 60.0 60.0 60.0
Co
mp
an
y R
ep
ort
See the last page for disclaimer Page 9 of 9
[Table_RightMar1]
22
No
ve
mb
er
20
18
[Table_RightMar2]
Vita
so
y I
nte
rna
tio
na
l 维
他奶
国际
(0
03
45
HK
)
[Table_PageHeader] Vitasoy International (00345 HK)
Company Rating Definition
The Benchmark: Hong Kong Hang Seng Index
Time Horizon: 6 to 18 months
Rating Definition
Buy 买入 Relative Performance>15%; or the fundamental outlook of the company or sector is favorable.
Accumulate 收集 Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable.
Neutral 中性 Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral.
Reduce 减持 Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable.
Sell 卖出 Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable.
[Table_IndustryRatingDefinition] Sector Rating Definition
The Benchmark: Hong Kong Hang Seng Index
Time Horizon: 6 to 18 months
Rating Definition
Outperform 跑赢大市 Relative Performance>5%; or the fundamental outlook of the sector is favorable.
Neutral 中性 Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral.
Underperform 跑输大市 Relative Performance<-5%; Or the fundamental outlook of the sector is unfavorable.
[Table_DISCLOSUREOFINTERESTS] DISCLOSURE OF INTERESTS
(1) The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report. (2) The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report. (3) Except for ALI PICTURES (01060 HK),KAISA GROUP (01638 HK),GUOTAI JUNAN I (01788 HK),BINHAI INVESTMENT (02886
HK),VALUE A SHARE (03095 HK),CAM SCSMALLCAP (03157 HK),Guotai Junan and its group companies do not hold equal to or more than 1% of the market capitalization of the issuer mentioned in this Research Report.
(4) Guotai Junan and its group companies have not had investment banking relationships with the issuer mentioned in this Research Report within the preceding 12 months.
(5) Guotai Junan and its group companies are not making a market in the securities in respect of the issuer mentioned in this Research Report.
(6) Guotai Junan and its group companies have not employed an individual serving as an officer of the issuer mentioned in this Research Report. There is no officer of the issuer mentioned in this Research Report associated with Guotai Junan and its group companies.
DISCLAIMER This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research reports, including investment banking, investment services, etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily). Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan. Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision. This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction. © 2018 Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved. 27/F., Low Block, Grand Millennium Plaza, 181 Queen’s Road Central, Hong Kong. Tel.: (852) 2509-9118 Fax: (852) 2509-7793 Website: www.gtja.com.hk
