\u3000\u3000 Eastroc Beverage (Group) Co.Ltd(605499) (605499)
Key investment points
Event: the company released its 2021 annual performance express, which realized an operating revenue of 6.98 billion yuan (+ 40.7%) and a net profit attributable to the parent company of 1.19 billion yuan (+ 46.9%); Among them, 21q4 achieved an operating revenue of 1.42 billion yuan (+ 54.9%) and a net profit attributable to the parent company of 200 million yuan (+ 82.3%) in a single quarter, which is in line with the performance forecast disclosure.
Continue to expand new products and accelerate national expansion. 1. Energy drinks are the core products of the company, mainly including Dongpeng special drink, 0 sugar special drink and Dongpeng Jiaxi. Dongpeng special drink, the main product, scientifically matches taurine, lysine and a variety of B vitamins to form a complete anti fatigue system; At present, it has the second market share in energy drinks. Actively build a “energy +” product line to meet the needs of different consumers and consumption scenarios through differentiated new products. Without comprehensive promotion and being separated from the traditional product network, 0 sugar special drink has brought hundreds of thousands of new customers and has development potential. In addition, new products such as orange lemon tea, Chenpi special drink, Dongpeng Daka and taneng are launched to expand soft drinks and female consumers. 2. Actively explore the national channel market and further improve the market share and coverage. Combined with the sales mode of “intensive cultivation + large circulation”, the company adopts the intensive cultivation mode in core markets such as Guangdong, Guangxi, East China and central China to enhance the channel penetration ability; Other regions adopt large circulation mode and make full use of dealer resources. By the end of 2021h1, the company has covered more than 1.79 million terminals. Through the Internet and new retail, we have gradually realized fine management and precision marketing, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) promotion and combination, and continued to obtain consumers’re purchase.
The construction of central China headquarters will improve the national layout, and the capacity bottleneck is expected to be alleviated. 1. The company signed a project entry agreement with the Management Committee of Changsha Jinxia Economic Development Zone, which will invest in the construction of central China regional headquarters and production base, reduce product transportation costs and further improve the national strategic layout. 2. Production bases in South China, Chongqing and Nanning will be built. After completion, it is expected to form a production capacity of 1.1 million tons, with a production period of about 5 years. The construction of production base will gradually release production capacity, alleviate the company’s production capacity bottleneck and strengthen the scale effect; At the same time, the construction of Chongqing base will help to further meet the market demand of the central and western regions and improve the market share. 3. The company signed an investment agreement with the Management Committee of Zhejiang Quzhou Zhizao new town and will invest 630 million yuan to build Zhejiang production base to meet the needs of the East China market.
Domestic energy beverage leaders fully benefit from the expansion of the industry. The growth rate of energy drinks led the soft drink industry, with a compound growth rate of about 9% in the past five years, ranking second in the soft drink industry. With the improvement of Chinese residents’ consumption level, the expansion of energy beverage consumption groups and the improvement of consumers’ acceptance of energy drinks, China’s energy beverage track still has a lot of room for growth. The company has promoted Dongpeng special drink in 500ml gold bottle since 2018. With the advantages of high cost performance and differentiated packaging, the company avoids direct competition with red bull and is more suitable for major consumer groups of energy drinks such as blue collar workers, drivers and couriers to achieve rapid and large-scale consumption. As a leading domestic energy beverage enterprise, Dongpeng will fully enjoy the bonus of capacity expansion of the energy beverage industry.
Profit forecast and investment suggestions. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 1.19 billion yuan, 1.57 billion yuan and 1.96 billion yuan respectively, and the EPS will be 298 yuan, 3.92 yuan and 4.91 yuan respectively. The corresponding dynamic PE will be 55 times, 42 times and 33 times respectively, maintaining the “buy” rating.
Risk warning: the nationwide promotion is not as expected; Intensified market competition; Food safety risks.
