Event: recently Tsingtao Brewery Company Limited(600600) , China Resources beer and Chongqing Brewery Co.Ltd(600132) disclosed the performance forecast / express respectively. According to the disclosed data, the profits of the three beer companies in 2021 all achieved rapid year-on-year growth, which confirmed our judgment on the high-end trend of the industry.
Tsingtao Brewery Company Limited(600600) : the annual profit increased by more than 40%, and the sales volume is expected to increase slightly. (1) In 2021, Tsingtao Brewery Company Limited(600600) is expected to realize a net profit attributable to the parent company of about 3.15 billion yuan, a year-on-year increase of + 43%, deducting a net profit not attributable to the parent company of 2.19 billion yuan, a year-on-year increase of + 21%. In the fourth quarter alone, the net profit attributable to the parent company lost 460 million yuan, deducting the loss of non attributable net profit of 1.02 billion yuan, an increase of 160 million yuan over the same period last year. We judged that the epidemic spread in many places in the fourth quarter had an impact on the company’s sales, the amortization effect of fixed costs was weakened, and the cost pressure was further revealed due to the tail raising factors of rising raw material prices. In addition, the company has carried out a number of marketing and promotion activities on the occasion of the Winter Olympics, and the investment in sales expenses has increased. (2) The annual sales volume is expected to increase slightly, and the revenue growth rate is faster than the sales growth rate. The company’s beer sales in the first three quarters were + 2% year-on-year. The epidemic in the fourth quarter had a certain impact on the company’s sales, but the fourth quarter was an off-season and had relatively little impact on the sales of the whole year. We judged that the annual sales volume was expected to increase slightly year-on-year, and the price per ton of wine would continue to increase, driving the revenue to achieve large single digit growth.
China Resources beer: the annual profit doubled, and the sales growth under the influence of the epidemic was under pressure. (1) The profit attributable to shareholders of the company is expected to increase by 110% – 124% in 2021. The main reasons are as follows: the company obtains after tax compensation of about 1.3 billion yuan for transferring land; The increase of the average selling price of products drives the increase of gross profit margin; The impairment loss of fixed assets and the decrease of one-time employee compensation and resettlement expenses lead to the decrease of administrative and other expenses. The profit attributable to shareholders of 2h21 company is expected to reach 110-410 million yuan, which is significantly higher than that of 2h20 in the same period (15 million yuan). We judge that the upgrading of the company’s product structure has accelerated, effectively driving the improvement of profitability; On the other hand, pay attention to improving the cost and cost-effectiveness, promote the improvement of operation efficiency through measures such as optimizing production capacity and closing inefficient plants, and reduce relevant expenses such as employee placement expenses. (2) It is expected that it will be difficult to achieve sales growth in 2021, and the price per ton of wine will continue to rise. The recurrence of the epidemic in some areas of 2h21 and the negative impact of weather factors on beer consumption, we judge that it is difficult to achieve sales growth in the whole year. In the second half of the year, the sales growth of the company’s sub high-grade and above products slowed down slightly under the influence of the epidemic, but it is still expected to maintain a high growth rate throughout the year to promote the growth of revenue and ton wine price.
Chongqing Brewery Co.Ltd(600132) : the profit performance in the fourth quarter was brilliant, and the annual sales volume increased by 15%. (1) Under the reference standard, the company expects to achieve a revenue of 13.12 billion yuan in 2021, a year-on-year increase of 19.9%, and a net profit attributable to the parent company of 1.17 billion yuan, a year-on-year increase of 38.8%; 4q21 achieved a revenue of 1.93 billion yuan, a year-on-year increase of + 1.1%, and a net profit attributable to the parent company of 120 million yuan. We judged that the continuous improvement of the company’s product structure led to the improvement of profitability, and continued to promote the organizational structure optimization project and operation cost management project, so as to turn losses in the fourth quarter. (2) The annual beer sales of the company increased by 15% year-on-year. We judged that the sales of key single products such as Wusu and 1664 increased faster, driving the price of tons of wine of the company. (3) The company recently put forward the “sail 27” strategy, which will achieve “based on advantages, accelerate growth” and further enhance competitiveness through five key points: product portfolio, geographical layout, execution, corporate culture and capital investment.
Overall view of the industry: the epidemic has brought short-term disturbance, and the high-end process is still continuing. (1) According to the data of the National Bureau of statistics, China’s beer production from January to December 2021 was 35.624 million kiloliters, a year-on-year increase of + 5.6%, but it was still lower than the level in the same period in 2019. The beer production of 2h21 was basically the same as that of 2h20 in the same period. (2) In the short term, disturbing factors such as the epidemic and rising costs are still, and price increases are expected to become a common response. In the long run, we judge that China’s beer production and sales will continue to decline steadily. China’s beer industry has developed into a pattern of stock competition. Implementing high-end strategy and improving product structure will be an important growth logic for beer manufacturers. (3) We believe that enterprises with advantages such as product portfolio, sales channels, brand publicity and operation efficiency are more likely to win the competition for high-end beer. Recommend Tsingtao Brewery Company Limited(600600) and pay attention to China Resources beer, Chongqing Brewery Co.Ltd(600132) , Beijing Yanjing Brewery Co.Ltd(000729) .
Risk tip: the cost of raw materials fluctuated, and the impact of the epidemic exceeded expectations.
