A sensitivity analysis indicates that the restaurant industry's profit margins are relatively less affected due to lower exposure to costs associated with petroleum by-products. However, original equipment manufacturers (OEMs), sportswear companies, and collectible toy firms, which have higher cost exposure, may face more significant cost pressures. The correlation between various key raw material prices and changes in oil prices differs, and companies with higher profit margin levels are expected to demonstrate more resilient operating profits.

Regarding cost pass-through, theoretically, cost increases for OEMs can be absorbed by brands, but there may be timing differences in price adjustments. Furthermore, when demand is weak, some OEMs might choose to share part of the cost burden to gain market share. For sportswear companies, the trend in gross margins is believed to depend more on other factors such as discounts, though the current market environment may limit the ability to pass costs on to consumers. As for collectible toys, major players like Pop Mart (09992) and MINISO Group (09896) are expected to possess bargaining power with suppliers in the short term.

The popularity of intellectual property (IP) and products is seen as a key determinant of a brand's pricing power, while product category diversification can also help mitigate the impact. Attention should be paid to the indirect effects of rising oil prices, particularly on end-market demand. Covered restaurant companies, due to their average transaction value and essential nature, are relatively less affected, with positive signs observed in both demand and pricing since the beginning of the year.

However, collectible toys and apparel are discretionary, rather than essential, consumer goods. Weakening end-market demand could lead to revenue pressure and increased cost-sharing burdens. For OEMs, brands may also adopt a more cautious approach to ordering during periods of raw material price volatility. Nevertheless, brands and products within various sectors that are in a growth cycle are expected to show greater resilience.