\u3000\u3000 Eastroc Beverage (Group) Co.Ltd(605499) (605499)
Event: the company disclosed the 2021 annual performance express. In 2021, the company’s operating revenue was + 40.7% year-on-year, and the net profit attributable to the parent company was + 46.9% year-on-year. In the fourth quarter alone, the revenue was + 54.9% year-on-year, and the net profit attributable to the parent company was + 82.3% year-on-year. The performance is in line with expectations.
Key points supporting rating
Channel expansion + product expansion, with rapid growth in revenue and profit in 2021. (1) In 2021, the company realized an operating revenue of RMB 6.98 billion, a year-on-year increase of + 40.7%; The net profit attributable to the parent company was 1.19 billion yuan, a year-on-year increase of + 46.9%; Deduct the net profit not attributable to the parent company of RMB 1.08 billion, a year-on-year increase of + 34.7%. (2) We believe that the company’s channel expansion + product expansion strategy has achieved remarkable results. In terms of channels, the company has intensively cultivated mature markets in Guangdong and continued to expand markets outside the province. We judge that the income of markets outside the province has maintained rapid growth throughout the year, and the proportion has increased. In terms of products, the company continues to invest and seize the share in the energy beverage track, and actively build a “energy +” product line to meet the needs of different scenes and people and broaden the breadth of consumers. We expect the revenue of energy drinks to grow steadily throughout the year, and non energy drinks to improve significantly in the second half of the year.
The Spring Festival is ahead of schedule + the volume of new products, and the revenue increased significantly in the fourth quarter. (1) 4q21 achieved a revenue of 1.42 billion yuan, a year-on-year increase of + 54.9%; The net profit attributable to the parent company was 197 million yuan, a year-on-year increase of + 82.3%. The base of 4q20 is relatively low. We judge that the Spring Festival is superimposed in advance with the increase of new product sales, which promotes the significant growth of 4q21 revenue. At the same time, the contribution of non recurring profit and loss is large, which promotes the significant growth of net profit attributable to parent company. (2) Excluding the impact of non recurring profits and losses, 4q21 company deducted 119 million yuan of non attributable net profit, a year-on-year increase of + 13.1%. We judge that the company has stepped up its efforts in product promotion, new product promotion and market development, and seize the market by exchanging price for quantity.
Outlook: functional drinks are still the main line of development, and markets outside the province and non energy drinks will bring a new growth curve. (1) The scale of the energy beverage industry has grown steadily, and the main competitors are still affected by trademark disputes, releasing a certain growth space for other competitors. The company’s products have differentiated competitive advantages. The continuous and large volume of 500ml gold bottles will provide steady support for performance growth. In addition, the company’s new products such as 0 sugar, Jiaxi, big coffee and “she Neng” will bring performance increment. (2) The national market has a large growth space and is still in the development stage. The company actively arranges in terms of products, channels, supply chain and brand building, which is expected to continue the rapid growth momentum in markets outside the province.
Valuation
According to the performance forecast, we adjusted the previous profit forecast. It is estimated that the EPS in 21-23 years will be 2.98, 3.84 and 4.77 yuan, with a year-on-year increase of + 46.9%, + 28.9% and + 24.1%. The market space of energy drinks is still vast. We are optimistic about the development route of channel expansion + product expansion of the company, and maintain the overweight rating in combination with the current valuation level.
Main risks of rating
New product promotion and market development were not as expected, and the industry competition intensified.
