Zhongjin: Rising oil prices boost inflation expectations, mass brand structure optimization + efficiency improvement or reducing cost impact.

CICC released a research report stating that in March, raw material prices increased month-on-month, leading to a rise in costs. Initially, related sectors saw a short-term decline in stock prices due to market sentiment, but leading companies contributed to profit growth through direct price increases and product structure optimization. The recent increase in oil prices has fueled inflation expectations, and the bank believes that consumer goods companies may reduce profit fluctuations by locking in prices early, optimizing product structure, and improving efficiency. Key points from CICC: Geopolitical conflicts have driven up oil prices, as well as prices of PET and oil. In March 2026, crude oil prices were up by 30-40% year-on-year, while prices of materials such as PET and oil showed a positive correlation with crude oil prices. Reflecting on the previous cost increase cycle in 2021-2022, related sectors initially experienced a short-term decline in stock prices due to market sentiment, but leading companies contributed to profit growth through direct price increases and product structure optimization. In this cost cycle, the bank believes that consumer goods companies may reduce the impact of cost fluctuations on profits by locking in prices early, optimizing product structure, and improving internal efficiency. Soft drinks: In the short term, the bank believes that direct price increases are difficult, but companies may reduce the impact of rising costs through locking in prices early, focusing on high-priced products, and reducing promotions. Beer: According to the bank's calculations, packaging materials account for 51% of costs, and for every 10% increase in packaging material prices, the gross margin is impacted by -2.7 percentage points. Currently, aluminum can prices are up by 10% year-on-year. The bank believes that leading companies may contribute to profit growth through adjustments in internal can structures and efficiency improvements. Seasonings: Using Haitian as an example, if PET prices rise by 10%, the gross margin is impacted by -0.6 percentage points, and if soybean prices rise by 10%, the gross margin is impacted by -1.1 percentage points. Currently, many seasoning companies have already locked in prices early, and the bank expects limited impact from the short-term cost increase. Frozen foods: According to the bank's calculations, for every 10% increase in oil prices, the gross margin is impacted by -1.3 percentage points. The bank believes that manufacturers may reduce the share of oil costs by adjusting product structures. Snacks: Trends in snack raw materials in 2026 are diverging. The bank recommends focusing on segments with strong bargaining power in the industry chain, as well as categories with a good competitive landscape and a slight cost reduction, such as yeast, oats, and konjac categories. Risks: Continued rise in oil prices, food safety risks, and weakening demand due to macroeconomic environment.