Betting on Chinese Consumers
Want to invest in the Chinese consumer? So do many investment pros, but their stock picks are a bewildering array of companies as varied and fragmented as China's market itself.
Many economists expect 2004 to be a banner year for Chinese consumer spending, which is proving to be a pillar of the economy alongside exports and investment. Urban incomes have risen an average of 9% a year during the past four years, boosting the spending power of some 400 million urban residents. The growth in consumer credit has fed booms in home and car purchases. And while rural incomes have lagged behind, the recent increase in agricultural prices and reforms in rural land rights should help reverse this trend, some observers say.
But with China's market a fast-growing free-for-all with few truly national brands, investors seeking exposure to consumers must do their homework in a mind-boggling variety of sectors from soft drinks to sanitary napkins. Many consumer-goods companies are being hit by rising raw-materials prices coupled with falling prices for their own goods amid fierce competition. And with the 152% run-up last year of the Hang Seng China Enterprises Index -- which tracks the performance of Class H shares, or China-registered companies listed in Hong Kong -- fund managers say many good companies have become too pricey.
"Any stock that takes advantage of the Chinese middle-class consumer -- you're still in the game," said Yang Liu, managing director of Atlantis Investment Management (Hong Kong), which oversees more than $300 million in Hong Kong and China stocks.
Among her favorites: Shanghai Friendship Co., which trades on Shanghai's Class B share market, where shares are denominated in foreign currency. The company is the biggest shareholder of Lianhua Supermarket, China's biggest retail-chain operator, which is listed in Hong Kong. But while Lianhua's stock trades at a hefty 25 times 2003 earnings, Shanghai Friendship shares are trading at only 1.5 times 2003 earnings, Ms. Liu said, adding the company is heavily undervalued because it trades as a Class B share.
She also favors H shares Beijing Capital International Airport and Hainan Meilan Airport, as plays on the rise in air travel among urban residents. She believes both stocks are undervalued after their earnings and share prices were hit last year because of the SARS outbreak. "I prefer airports to airlines as plays on consumer travel, because airports are more stable," Ms. Liu says.
In autos, she sees a bargain in Chinese truck maker Great Wall Automobile, whose performance lagged behind that of other Hong Kong-listed car and truck makers since its December debut on the Hong Kong stock market. As China's biggest maker of pickup trucks, Great Wall is a strong play on the rural market, where many burgeoning entrepreneurs buy Great Wall trucks to deliver their goods, said Ms. Liu.
Talk to another fund manager, and you get a different list of companies. Chris Ruffle, Shanghai-based director of Martin Currie Investment Management, likes companies that have managed to thrive despite the twin pressures of rising commodity prices and falling retail prices. One is Singapore-listed Want Want Holdings, a snack-food maker that does the bulk of its business in China. The company has successfully launched cheaper brands while protecting the image and profit margins on its high-end brand, Mr. Ruffle said. Want Want earlier pulled off the same market-segmentation strategy in Taiwan, where it now dominates the snack-food category, he says.
Another company benefiting in a difficult climate: Gree Electric Appliance, one of China's leading air-conditioner makers. While price wars and rising raw-materials costs are squeezing smaller players, Gree is poised to benefit from the sector's consolidation, Mr. Ruffle predicts. The company sells products under its own brand in China and also makes air-conditioners for export, primarily under other brand names.
Mr. Ruffle also likes Hengan International Group, China's largest maker of disposable diapers and sanitary napkins, which is listed in Hong Kong. The company's purchase last year of a tissue-paper manufacturer has allowed it to reduce its dependence on its core businesses and to leverage its distribution channels, he said.
Some analysts see a turnaround story in Tingyi Holding, a Hong Kong-listed company that sells instant noodles and drinks in China. In January, Merrill Lynch changed its recommendation on the stock from to "buy" from "sell," citing the company's recent sale of half of its beverage business to Japan's Asahi Breweries and trading company Itochu. The move will help Tingyi launch innovative products and reduce its debt, says Grace Mak, vice president of China equity research for Merrill Lynch in Hong Kong. In 2003, Tingyi's stock lagged behind the Hang Seng China Enterprises Index by 57% because of flat beverage sales and rising raw-material costs, she says.
谨慎选择中国消费类股
你想在中国消费品领域投资吗？许多股市投资者正有此意，但他们选择的股票却像中国消费品市场一样五花八门。
许多经济学家预计，2004年将是中国消费开支突飞猛进的一年，消费将与出口和投资一道，成为支撑中国经济增长的三大支柱。在过去4年间，中国大约4亿城市居民的人均收入平均每年增长9%，大大提升了他们的消费能力。消费信贷的增长推动了住宅和汽车消费。尽管农村人口收入增长相对滞后，但一些观察家认为，近期农产品价格上涨及农村土地所有权改革将有助于扭转这种局面。
但中国快速增长的消费市场上鱼龙混杂，几乎没有一个真正的国产品牌。而且从软饮料到卫生巾，分布著不计其数的产品门类。因此，希望在这一市场投资的人士务必三思而行。
目前，许多消费品生产企业一方面承受著原材料价格上涨的压力，一方面又遭受到产品价格下降的打击。鉴于这种情况，基金经理们认为，在香港恒生中国企业指数去年暴涨152%之后，许多绩优股的股价已经太贵了。恒生国企指数是衡量在港上市的大陆企业股票的指标。
香港西京投资管理公司(Atlantis Investment Management (Hong Kong))董事总经理刘央说，大陆中档消费品市场增长势头不减，投资者今年若专注于此仍能赚到钱。该公司旗下持有价值3亿美元的香港和大陆股票。
她最看好的股票之一是大陆的友谊B股(Shanghai Friendship)。该公司是联华超市(Lianhua Supermarket, 0980.HK)最大的股东，后者则是在香港上市的大陆最大的连锁零售百货店。联华超市的股价目前高达其2003年每股收益的25倍，而友谊B股的本益比却只有1.5倍。刘央说，由于是在B股市场交易，其股价被严重低估。
随著越来越多的中国城市居民选择乘飞机旅行，她还看好北京首都机场(Beijing Capital International Airport,0694.HK)和海南美兰机场(Hainan Meilan Airport, 0357.HK)。她认为，这两家公司的利润和股价去年受到了非典型肺炎(SARS)的打击，目前它们的股价被低估了。刘央说，与航空公司相比，她更看好机场，因为它们更稳定。
在汽车类股方面，她认为大陆卡车生产商长城汽车(Great Wall Automobile Holding, 2333.HK)价格相对低廉，该股自去年12月份在香港上市以来，股价的表现一直落后于其他在香港上市的汽车企业。而长城汽车作为中国最大的小型货车制造商，选择该股是面向大陆农村市场的一笔强劲投资，日益扩大的乡镇企业对其产品会有强劲需求。
另一位基金经理克里斯?鲁弗尔(Chris Ruffle)则另有所好。他是Martin Currie投资管理公司驻上海的主管。他看好那些在原材料涨价和产品价格下跌的双重压力下仍实现丰厚业绩的公司。
比如在新加坡上市的旺旺控股(Want Want Holdings Ltd., W08.SG)，这是一家主要业务在大陆的休闲食品生产商。鲁弗尔说，该公司在保持高档品牌形象和利润率的同时，成功推出了许多低价品牌。旺旺此前在台湾同样成功运用了市场细分战略，目前它在台湾休闲食品行业占据著主导地位。
另一家在不利环境下却因祸得福的是大陆空调生产商格力电器(Gree Electric Appliance)。鲁弗尔预计，在价格战和原材料涨价使小型空调企业腹背受敌的情况下，格力电器却有可能因空调业重新洗牌而受益。该公司自有品牌的产品主要在国内销售，同时它还贴牌生产其他品牌的空调供出口。
鲁弗尔还看好恒安国际(Hengan International,1044.HK)，它是一家生产尿不湿和卫生巾的企业，在香港上市。他说，该公司去年收购了一家纸巾纸生产厂，这将使它减少对核心业务的依赖，并可充分利用已有的分销渠道。
一些分析师预计，在大陆销售方便面和饮料的康师傅控股(Tingyi Holding)将有所好转。1月份，美林(Merrill Lynch)将对该股的卖出评级上调为买进。美林驻香港的中国股票研究部门副总裁格雷斯?麦克(Grace Mak)说，康师傅控股最近将其饮料业务的半数股权卖给了日本朝日啤酒(Asahi Breweries)和伊藤忠(Itochu)合资的控股公司。这一举动将有助于它推出新产品并减少债务。她说，2003年，由于销售平平且原料涨价，康师傅的表现较恒生指数落后57%。
