Morningstar: CN Plague May Peak in 6-8 Weeks; Consumption Sector Top-picks Baba, Yum China
Morningstar: CN Plague May Peak in 6-8 Weeks; Consumption Sector Top-picks Baba, Yum China
Lorraine Tan, Director of Equity Research in Asia for Morningstar, pinpointed the overdone market reaction to this round of epidemic in Mainland China, with quite a lot of Shanghai factories resuming production at the moment. Supply and logistics issues have relatively been alleviated as compared with the case in 2020, but U.S. rate hike and other adverse factors are still affecting investors.
As for the consumption sector, Morningstar predicted the peak of China's epidemic in six to eight weeks. This, coupled with persistent anti-Covid measures, may weaken the country's retail sales growth in the second quarter.
BABA-SW (09988.HK) and YUM CHINA-S (09987.HK) are among the sector top-picks. On one hand, macro improvement and a larger share buyback scale should be conducive to BABA-SW's 2H performance. On the other hand, YUM CHINA-S will be a long-term beneficiary of China's population structure changes, with huge upside room for fast-food penetration.
晨星亞洲股票研究的董事分析師Lorraine Tan指出，市場對中國大陸這輪疫情反應過度，目前上海不少工廠已恢復生產。與2020年相比，供應和物流問題已經相對緩解，但美國加息等不利因素仍在影響投資者。
至於消費領域，晨星預測中國疫情的高峯將在六到八週後出現。這一點，加上持續的防寒措施，可能會削弱該國第二季度的零售額增長。
阿里巴巴-SW(09988.HK)和百勝中國-S(09987.HK)是行業首選。一方面，宏觀改善和更大的股份回購規模應該有利於阿里巴巴-SW的2H業績。另一方面，百勝中國-S將成為中國人口結構變化的長期受益者，快餐滲透的上行空間巨大。