\u3000\u3 Bohai Water Industry Co.Ltd(000605) 499 Eastroc Beverage (Group) Co.Ltd(605499) )
Event:
Eastroc Beverage (Group) Co.Ltd(605499) : the company issued an annual report. In 2021, the annual operating revenue was 6.978 billion, the same as + 40.72%; The net profit attributable to the parent company was 1.193 billion, the same as + 46.90%; Deduct non net profit of 1.084 billion, the same as + 34.71%. EPS is 3.11 yuan / share, and it is proposed to send 15 yuan in cash (including tax) for every 10 shares.
Key investment points:
1. Q4 revenue continued to increase, and the annual performance ended successfully. In 2021, the company's annual revenue maintained a high growth. The profit side benefited from factors such as locking the low price of pet, increasing the ex factory price of products, increasing the revenue contribution of 500ml gold bottles, and obtaining positive returns from investment funds, which grew faster than the income side. 2021q4 achieved a revenue of 1.418 billion yuan, a year-on-year increase of + 54.95%. The main reasons for the acceleration of revenue growth are as follows: 1) the terminal dynamic sales are good, the channel inventory in some regions in January 2021 is low, the Spring Festival is earlier, and the payment and delivery of the company in the new business year is earlier than that in previous years; 2) The process of nationalization accelerated, and the Guangdong base camp continued to promote channel sinking and intensive cultivation through all channels, maintaining rapid growth; The promotion outside the province was smooth, accelerating the improvement of product market rate and the development of blank market. 3) At the same time, the company extended and widened the "energy +" product line to cover more consumers, superimposed Wuxi Online Offline Communication Information Technology Co.Ltd(300959) multi-channel promotion, and contributed to new revenue growth.
2. Large items continued to grow at a high rate and the process of nationalization accelerated. 1) In terms of products, the company's 500ml bottled / 250ml bottled / 250ml Tetra Pak achieved revenue of 5.024/8.48/123 billion respectively, with a year-on-year increase of + 76.22% / + 3.3% / + 46.34%. Energy drinks accounted for 94.66% in total, and other drinks accounted for 5.34%. Large single 500ml gold bottles were the main source of revenue, maintaining a high growth throughout the year. 2) By region, the income of Guangdong base camp reached 3.199 billion yuan in 2021, with a year-on-year increase of + 45.94%, which is still the largest market. East China has accumulated a lot and made little progress. The annual growth rate reached 79.07%, leading other regions. It reached 772 million yuan in 2021, with a year-on-year increase of 2.35 PCT to 1.08%. The second largest market position is stable. Looking at 2021q4 alone, the income growth rate in Guangdong reached 42.2%, with bright growth. East China / Central China / Guangxi / Southwest / North China were + 12.5% / 49.0% / 65.1% / 77.4% / 67.1% respectively, with high growth rates.
3. Investment income increases profits, and channel promotion expenses affect short-term profits. The net profit attributable to the parent company in 2021q4 was 197 million, the same as + 82.30%, with a significant increase. The main reason is that the investment income brought by the private equity fund subscribed by the company is included in the income from changes in fair value and thickened the profit performance. After excluding the impact of this part, the non net profit deducted was 119 million, the same as + 13.09%, which is in line with the expectation. In 2021q4, the company increased the channel promotion expenses such as network development and freezer launch, and the spring festival marketing expenses are mostly recorded in Q4. Therefore, the sales expenses of Q4 increased significantly, and the sales rate increased by 2.0pct to 12.0%. The increase in the price of raw materials such as sugar affected the gross profit performance. The gross profit margin of Q4 decreased by 2.6pct to 28.2% year-on-year. The growth on the profit side slowed down in the short term, slower than that on the income side, and the net profit margin decreased by 3.1pct to 8.4%. In 2021, the cost of pet and other packaging materials increased significantly, and the company hoarded goods and locked prices in advance, which had little impact on the profitability of the whole year. Since the beginning of 2022, the price of pet has stabilized, but it is still high. It is expected that the cost pressure will become a common problem faced by the soft beverage industry. As a leading enterprise of energy beverage, the company has strong anti risk ability. In the new sales year, it has increased the ex factory price of 500ml gold bottles and other products, which can cover part of the rising cost, and alleviate the cost pressure through cost optimization, The profit side is expected to be limited.
4. The competition pattern of the industry is improving, and we are optimistic about the long-term growth of the company under the national expansion. Energy drinks are still in the stage of rapid development. According to the data of the company's annual report, the growth rate of coffee drinks and energy drinks segment market in 2021 is ahead of that of soft drinks industry. Industry leader Red Bull is still limited, and the trademark dispute has stopped, which is good for local enterprises. In 2021, the sales volume of Dongpeng special beverage in China's energy beverage market increased from 27.0% to 31.7%, becoming the highest sales volume of energy beverage in China; The market share of sales increased from 20.2% to 23.4%, ranking second. Looking forward to 2022, the company's headquarters in Guangdong will continue to intensively cultivate channels and tap the sinking market demand. It is expected that the sales will be stable, the weak areas will be promoted smoothly, and there is still a large blank market outside the province. (1) On the product side, the large single product 500ml gold bottle meets the cost performance needs of the target group and continues to be in high volume. Last year, the company launched Zero sugar products, coffee beverage Dongpeng "big coffee" and female energy beverage "taneng" respectively in April, September and December, and developed taurine vitamin beverage. This year, it will continue to promote a new and rich product matrix of functional beverage "energy +", Expand the coverage of consumer groups, including light energy drinks "Dongpeng sports special drink", "Dongpeng bubble special drink", 250ml new gold cans and 335ml slim cans. The contribution income of new products can be further increased. (2) On the channel side, the company promoted channel development and freezer launch last year. By the end of the year, there were 2312 dealers, and the annual sales network covered about 2.09 million terminal stores across the country, which increased rapidly compared with 1.79 million in the first half of last year, and there is still broad space compared with red bull. (3) On the brand side, the company expects to enhance brand awareness and reputation with the help of sports events. Dongpeng special drink has become the official designated drink of Hangzhou Asian Games and Shantou Asian Youth Conference. In addition, the company will deepen the brand symbol of "drinking Dongpeng special drink when tired and sleepy", tap demand scenes and create brand memory points. The improvement of brand strength is also conducive to the development of the company in the blank market and is optimistic about the long-term growth of the company.
5. The profit forecast and investment rating company is still in the stage of national expansion. Its headquarters, Guangdong, still has steady growth under a high base. After years of hard work, East China and central China began to increase in large quantities and grow rapidly, becoming the second and third largest markets respectively. The company still has potential in the north and North China. With the advantages of high cost performance, convenient carrying, good effect and good taste of the company's large single products, it is expected to take advantage of Red Bull's deep involvement in the trademark dispute to realize rapid growth. We estimate that the company's net profit attributable to the parent company in 2022 / 2023 / 2024 will be RMB 1.43/17.4/2.07 billion, a year-on-year increase of + 19% / 22% / 20%, corresponding to Eps3 56 / 4.34/5.18 yuan, pe48 / 39 / 33 times, with a "buy" rating.
6. Risk tips (1) risks with single product structure and concentrated regional distribution of the company; (2) The growth of energy beverage industry is less than expected; (3) Price reduction risk of three Red Bull brands; (4) The company's core potential and market investment attraction are less than expected; (5) Food safety risks.
