Consumer Staples Author: Yue Liu Editor: Luke Sheehan Jul 21, 2020 10:13 AM (GMT+8)

... yet the valuation of many food companies is close to historical highs.

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According to CICC, segmented leaders' market share may increase due to a relatively low P/E. Though the cost of raw materials showed an upward trend, short-term pressure is expected to be manageable in 2020.

Sanquan Food (002216:SZ): revenue up 18% and net profit up 420%. The increase in the proportion of high-margin products such as Zongzi, popular during the Dragon Boat Festival, contributed most to earnings and profitability in 2Q2020.

Three Squirrels (300783:SZ): revenue up 16% and net profit down 23%. Affected by the decentralization of e-commerce traffic, sales have declined since May, and the decline has expanded in June, dragging down the overall growth rate of 2Q2020.

BESTORE (603719:SH): revenue up 7% and net profit down 13%. As BESTORE is actively competing with Three Squirrels, the decentralization of e-commerce traffic brought the same impact to BESTORE.

Juewei Food (603517:SH): revenue down 1% and net profit down 17%. Affected by the epidemic, the passenger flow of most community stores has dropped significantly, lowering revenue and profits.