\u3000\u3 Bohai Water Industry Co.Ltd(000605) 499 Eastroc Beverage (Group) Co.Ltd(605499) )
Event: Eastroc Beverage (Group) Co.Ltd(605499) released the annual report of 2021. In 2021, the operating revenue was 6.978 billion yuan, a year-on-year increase of + 40.72%, the net profit attributable to the parent company was 1.193 billion yuan, a year-on-year increase of + 46.90%, and the net profit not attributable to the parent company was 1.084 billion yuan, a year-on-year increase of + 34.71%. Among them, 2021q4 achieved an operating revenue of 1.418 billion yuan, a year-on-year increase of 54.95%, a net profit attributable to the parent company of 197 million yuan, a year-on-year increase of 82.30%, and a net profit not attributable to the parent company of 119 million yuan, a year-on-year increase of 13.10%.
The performance of energy drinks is stable, with rapid growth in East China and southwest China. By product: Dongpeng special drink achieved a revenue of 6.592 billion yuan in 2021, a year-on-year increase of + 42.34%, of which the revenue of 500ml gold bottle was + 62.84% year-on-year; Other beverages achieved a revenue of 372 million yuan, a year-on-year increase of + 22.19%. By channel: in 2021, the distribution and direct sales revenue was + 40.40% / + 43.29% year-on-year; The growth momentum of online platforms was strong, and the revenue was + 88.42% year-on-year. In terms of sub regions, Guangdong, the core market, maintained steady growth, with a year-on-year revenue of + 29.7% / + 42.2% in 2021 / single Q4. In the market outside the province, the revenue of East China, Southwest China, North China + North China achieved rapid growth in 2021, with a year-on-year increase of + 79.1% / + 65.4% / + 45.0%, and the revenue of single Q4 was + 112.6% / + 77.4% / + 54.5%. By the end of 2021, the company had 2312 dealers in China, with a net increase of 712 in 2021 and 164 in single Q4, including 43 / 41 / 116 in East China, Southwest China and North China + North China respectively.
The annual cost is relatively controllable, and the investment income contributes to the performance. The gross profit margin of 2021q4 company was 28.2%, year-on-year -17.5pct, and the sales expense rate was 12.0%, year-on-year -12.9pct. The significant changes in gross profit margin and sales rate were mainly due to the reclassification of transportation expenses to operating costs after the change of accounting policies. Throughout the year, the gross profit margin excluding freight in 2021 was + 0.74pct year-on-year, mainly due to the increase in the proportion of high gross profit 500ml gold bottle revenue, and the superposition company locked the purchase price of PET chips in advance. Q4 management expense ratio was 4.0%, with a year-on-year increase of -1.9pct, mainly due to the decrease of expense ratio under the effect of scale. In addition, private fund investment income and government subsidies also contribute to Q4 performance. Overall, the net interest rate of 2021q4 was 13.9%, with a year-on-year increase of + 2.1pct.
Expand the "energy +" product line and continue to steadily promote nationalization. In terms of product strategy, the company is actively building a "energy +" product matrix. In 2022, the company plans to launch light sports special drinks, Jinshuang bubble special drinks, 250ml new gold cans, 335ml slim cans and other products to meet the diversified needs of consumers. In terms of channel expansion, East China is the market that the company entered earlier, with relatively perfect distribution system, large population base in Southwest China and great development potential. The company will focus on East China and southwest markets in the future. At the same time, the company will continue to cultivate its base camp in Guangdong. In 2022, it plans to set up a catering area in Guangdong to increase the penetration of Dongpeng special drink in catering channels. It will also actively promote non energy drinks such as orange lemon tea and tangerine peel special drink.
Profit forecast, valuation and rating: we maintain Eastroc Beverage (Group) Co.Ltd(605499) 20222023 net profit forecast of 1.508/1.912 billion yuan, increase 2024 net profit forecast of 2.311 billion yuan, equivalent to 20222024 EPS of 3.77/4.78/5.78 yuan. The current share price corresponds to 45 / 35 / 29 times of PE in 20222024, maintaining the "overweight" rating.
Risk warning: the process of nationalization is not as expected; Industry competition intensifies; Raw material costs rose more than expected.
