\u3000\u3000 Chongqing Brewery Co.Ltd(600132) (600132)
Event: Chongqing Brewery Co.Ltd(600132) released the 2021 performance express. Under the reference standard, the annual operating revenue in 2021 was 13.119 billion yuan, a year-on-year increase of + 19.90%; The net profit attributable to the parent company was 1.166 billion yuan, a year-on-year increase of + 38.82%. Among them, 2021q4 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, with a loss of 7.09 million yuan in the same period last year, and the profit side performance exceeded market expectations.
The growth was driven by the simultaneous rise of volume and price, and Wusu, a large single product, performed well. In terms of split volume and price, in 2021, the company’s sales volume increased by about 15% year-on-year, and the price per ton of wine increased by 5% year-on-year. Among them, Wusu, the main product, maintained good performance. It is estimated that the annual sales volume is about 830000 tons, accounting for 30%, with a year-on-year increase of 34%, and the sales volume outside Xinjiang is about 450000-500000 tons. 1664 maintained the growth trend, and the sales volume increased by 36% year-on-year in 2021. In order to enhance the potential energy of Wusu brand, the company further increases the layout of Wusu brand: 1) launch small bottle Wusu to enrich consumption scenes, and it is expected to gradually develop entertainment channels in 2022; 2) Upgrade the internal structure of the brand, launch the high-end product Loulan secret brew, and enhance the brand influence; 3) This year, white beer will go out of Xinjiang and enter the market outside Xinjiang. With the enrichment of product matrix, Wusu brand potential can be further strengthened.
Readjustment of organizational structure and optimization of production capacity contribute to development. In November 2021 Chongqing Brewery Co.Ltd(600132) , the market management power was further divided. Each business unit was clearly divided according to the regional structure, which effectively avoided the internal competition among teams and is expected to improve the overall operation efficiency. The company’s plan is to accelerate the development of the national market in 2022. At the same time, Carlsberg group released the “sail 27” strategy. The group listed the Chinese market as a strategic focus in geographical areas. In the future, Carlsberg group will continue to promote the big city strategy, strengthen channel development and maintain its excellent performance in China.
The production capacity of Chongqing Brewery Co.Ltd(600132) is mainly distributed in the central and western regions, but the development of new markets is mainly concentrated in East and South China, resulting in an increase in logistics costs due to long-distance transportation in some regions. In order to optimize the production capacity layout and reduce operating costs, the company has successively increased production capacity in East China and South China to make up for the gap in new market production capacity, help the national development of Wusu and improve the profitability of the company.
Price increases cover cost pressures. Since 2020h2, the cost of raw materials and packaging materials has shown an upward trend, and the cost side of the company has been under pressure. Chongqing Brewery Co.Ltd(600132) it is planned to adjust the price of hongwusu outside Xinjiang by 5% from February 2022. Other brands are flexibly fine tuned according to different regions / channels. It is estimated that the average ex factory price of the company will increase by 4% – 8%. The price of packaging materials such as cost side glass has begun to fall, and the price of raw material barley is still high. Overall, we believe that the cost side pressure in 2022 will be less than that in 2021, and price increase + product structure upgrading can cover the cost item pressure.
Profit forecast, valuation and rating: the smooth expansion of the company’s channels, the adjustment of organizational structure and the optimization of production capacity will further improve operation efficiency and accelerate market development. The richness of Wusu products is expected to increase the synergy between products and extend the life cycle of Wusu brand. We continue to be optimistic about the growth potential of Chongqing Brewery Co.Ltd(600132) and raise the net profit of Chongqing Brewery Co.Ltd(600132) 21-23 years to RMB 1.166/14.52/1.756 billion (12.3% / 9.7% / 10.1% higher than the previous time), corresponding to EPS of RMB 2.41/3.00/3.63. The current stock price corresponds to 46 times of PE in 22 years, which has fallen below the valuation center in recent three years. Maintain the “buy” rating and the target price is 186 yuan.
Risk warning: the intensity of marginal competition in the industry is higher than expected; The rise in raw material costs was higher than expected.
