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<Research> G Sachs: Logistics Cost Inflation Emerges for Mainland Staples Firms, Greater Profit Impact on Tingyi, Uni-President China
G Sachs said in a report that since March to April, broad-based logistics cost inflation has begun to emerge among the China staples stocks under its coverage (for example, compani...
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<Research> G Sachs: Logistics Cost Inflation Emerges for Mainland Staples Firms, Greater Profit Impact on Tingyi, Uni-President China
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G Sachs said in a report that since March to April, broad-based logistics cost inflation has begun to emerge among the China staples stocks under its coverage (for example, companies such as Haitian and Yihai have mentioned this). At the same time, the market is fully aware that the cost-locking advantage of packaging materials (especially PET) will gradually turn into a headwind when the new procurement season starts in 2H26.

Its cost tracking shows that diesel prices have risen 5% year-to-date, while the average daily price since May has increased 11% compared with the 2025 average level. Historically, the correlation coefficient between diesel prices and Brent crude oil prices exceeds 0.8. For reference, Brent crude oil prices have surged 80% year-to-date, driving the average wholesale price of diesel up 20% year-to-date.

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For pure beverage companies covered by G Sachs (including Dongpeng Beverage, Nongfu Spring and China Resources Beverage, with some figures based on G Sachs estimates), logistics costs account for a high single-digit to low double-digit percentage of their cost of goods sold (COGS). For other staples companies under coverage (including frozen food, condiments, dairy products and beer), logistics costs account for a mid-single-digit to mid-teen percentage of COGS. Most baijiu producers and value retailers have relatively limited exposure to logistics costs. As of May 10, diesel prices were 11% higher than the 2025 average level, which in theory could pose a low single-digit to high single-digit downside risk to net profit for the companies under coverage, with the largest impact on beer, dairy and beverage companies such as Tingyi and Uni-President China. (da/u)

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