\u3000\u3000 Chongqing Brewery Co.Ltd(600132) (600132)
Events
1. The company issued the 2021 performance express: under the reference standard: the 2021 company achieved an operating revenue of 13.119 billion yuan, + 19.90%; The net profit attributable to the parent company was 1.166 billion yuan, + 38.82%; Deduct the net profit not attributable to the parent company of RMB 1.143 billion, + 76.14%. 21q4 achieved an operating revenue of 1.933 billion yuan, a year-on-year increase of + 1.08%; The net profit attributable to the parent company was 122 million yuan, turning losses into profits, with a year-on-year increase of 130 million yuan; Deducting the net profit not attributable to the parent company of 117 million yuan, the company turned losses into profits, with a year-on-year increase of 136 million yuan.
2. On February 3, 2022, Carlsberg group released Yangfan 27 strategy. 2023 will be the first year of Yangfan 27 strategy.
Comments
The growth momentum of Wusu and 1664 was strong, and the structural upgrading promoted the significant increase of ton price
Revenue side: the operating revenue of 21q4 increased by + 1.08% year-on-year to RMB 1.933 billion, specifically: 1) volume: the overall sales volume of the company increased by about 15% in 2021, and the output of the beer industry increased by about 5.6% year-on-year in 2021. The growth of the company was significantly faster than that of the industry; The sales volume of 21q4 company decreased by about 2.67%, mainly due to the disturbance of 21q4 epidemic in China and the high base under the superposition of 20q4 domestic consumption rebound; 2) Price: in 2021, the company’s ton price increased by 4.26% year-on-year to 4707 yuan / ton; The price of 21q4 tons increased by about 4%, mainly due to the upgrading of product structure and the price increase of Wusu in Xinjiang in September 21. On the product side – in 2021, the sales volume of Wusu increased by about 34% year-on-year, and the sales volume of 1664 increased by about 36% year-on-year, continuing the high growth; Lebao and Chongqing maintained rapid growth, and the sales of local brands such as Dali and Xixia also increased to varying degrees.
The profit performance of 21q4 exceeded expectations and the organizational unit was adjusted smoothly
Profit side: the net profit attributable to the parent company of 21q4 turned losses into profits, with a year-on-year increase of 130 million yuan. The profit performance exceeded expectations, mainly due to: 1) the high base of 20q4 expenses. The intermediary expenses arising from the major asset restructuring in 2020 and the historical litigation expenses of Chongqing Jiawei were accrued at one time in 20q4, while the expense end in 21q4 performed normally; 2) Excellent cost control. The company continued to promote cost control projects and optimize cost structure in 21q4; 3) The upgrading of product structure + the price increase of Wusu in Xinjiang in September 21 also increased profits.
Market side: 1) continuous promotion of big city plan: as of 21q3, the company has developed 61 big cities covering the whole country, including 20 big city plans exclusive to ussu, and the process of nationalization is gradually deepened. In 2022, it is planned to continue to add 15 big cities in addition to consolidating the original big cities, mainly covering the markets of East China and South China. 2) The organizational structure of business units has been adjusted smoothly: the company issued the announcement on the adjustment of regional division of Carlsberg China business units in 2022 in November last year, and completed the division of Bu sales regions on December 31 last year. At the same time, the territorial organizational structure and reporting relationship have been adjusted in place, and the market development work has been carried out in an orderly manner.
Short term: Wusu products and marketing are comprehensively upgraded, and the price increase in the off-season is expected to release the performance flexibility in the peak season
With product upgrading + structural optimization + precision marketing + price increase outside Xinjiang + capacity expansion, Wusu is expected to maintain high growth in 22 years: 1) product upgrading: at the beginning of the year, the company upgraded Wusu wheat white to Wusu white beer, and upgraded Wusu products in entertainment channels to new products with 330ML alcohol concentration of 4 degrees, so as to meet the demands of consumers; 2) Structure
Optimization: focus on the development of hongwusu outside Xinjiang + extension of the product line, and the product matrix is conducive to the development of Wusu’s omni-channel and multi consumption scenarios; 3) Precision marketing: Recently, Wusu announced that Wu Jing, as the spokesman of the new brand, strengthened the tone of “hard core” and maintained the popularity of the brand; 4) Price increase outside Xinjiang: Wusu in Xinjiang has raised its price in September of 21, and Wusu outside Xinjiang will raise its price from February to April of 22, with a price increase range of about 5%, so as to consolidate Wusu’s dominant position in the 10 yuan price band, and superimpose price locking measures for upstream raw materials to effectively alleviate the upward pressure on costs, which is expected to release performance flexibility in the peak season; 5) Capacity expansion: 130000 ton Yancheng plant is put into operation, and 500000 ton Foshan plant is proposed to alleviate the uneven distribution of capacity in the East and West.
Long term: Yangfan 27 strategy has been implemented, and the Chinese market has a prominent position in the group
On February 3, Carlsberg group released the Yangfan 27 strategy. During the Yangfan 22 strategy, China became Carlsberg’s largest market in the world. The Yangfan 27 strategy emphasizes “continuing to succeed in China”. Specifically: 1) product side: strengthen high-end products, consolidate mainstream core beer and create a win-win product portfolio. Each Bu will formulate development plans according to local conditions; 2) Channel side: proficient in digital connection + end-to-end management of supply chain. The company will use digital to assist decision-making and optimize supply chain management. In addition, the company has established an independent e-commerce department, which will be an important development opportunity after the epidemic; 3) Market side: guided by building more high profit base markets and accelerating the development of high potential markets, the company will develop markets according to local policies. We believe that it is of great significance for the Chinese market to be highlighted in the group for the first time in the Yangfan 27 strategy. Carlsberg group is expected to further empower the Chinese market in an all-round way in the future, support procurement, human resources, finance, brand operation, supply chain management and other links, and the company will maintain a rapid development trend.
Profit forecast and valuation
We believe that the implementation of Yangfan 27 strategy is conducive to the long-term development of the company. In the future, Chongqing Brewery Co.Ltd(600132) will benefit from the excellent performance of Wusu Beer, the acceleration of national expansion, the coordinated development of multiple brands and the continuous expansion of production capacity. It is estimated that the revenue growth rate from 2021 to 2023 will be 19.9%, 19.5% and 15.3% respectively; The growth rate of net profit attributable to the parent company was 8.3%, 27.2% and 26.3% respectively; EPS is 2.4 / 3.1 / 3.9 yuan / share respectively; PE is 54 / 42 / 33 times respectively. In the long run, the performance has strong growth, the current valuation is cost-effective, and the buy rating is maintained. Catalyst: the upgrading of consumption continues and the nationalization of USSR develops smoothly.
Risk tip: the epidemic situation in China broke out again, affecting the overall dynamic sales of beer; The situation of Wusu movable sales was less than expected.
