【英文】瑞银报告：中国猪肉市场报告（41页）

The December 2019 survey results indicated consumer demand for packaged meat  is fairly sensitive to price changes, with 5%/10%/20%/30% price hikes likely to  result in 11%/23%/39%/40% of regular buyers cutting back on their purchase  frequencies. In the December 2019 UBS Evidence Lab survey, SH appeared to be maintaining its  leading position in the China packaged meat market in terms of brand awareness,  purchase frequency and quality perception, followed by Jinluo and Yurun, with  SH’s lead against the latter two narrowing compared with the April 2019 survey.  These top-three brands collectively represented 58% of the most often purchased  packaged meat brands by regular buyers in the December 2019 survey, down from  72% in the April 2019 survey. SH’s premium WLTM brand, Smithfield, which was  launched in 2015, still has low consumer awareness and purchase frequency. In terms of repurchase intention and outlook for spending increase in the next six  months, SH and Jinluo respectively emerged as the top- and second-ranked  choices by regular buyers among the three major brands in the December 2019  UBS Evidence Lab survey.

Historical 12-month forward PE: Based on our estimates, SH is trading at 22.1x  12-month forward PE, which is about 2.8 SD above its historical average. SH's 12- month forward PE started to expand in mid-February 2020 and reached its current  five-year historical high, mainly due to its seemingly unaffected packaged meat  demand (a boost in demand for packaged meat in the near term due to hoarding  and prolonged duration in higher China hog prices) from the COVID-19 outbreak.  In addition, we think the good liquidity in A share market is also an important  reason for SH's high PE in the near term. We believe further valuation upside for  SH's could be derived once its packaged meat premiumisation efforts pay off.