Chongqing Brewery Co.Ltd(600132) (600132)
Ping An View:
Chongqing Brewery Co.Ltd(600132) is the only platform for Carlsberg to operate beer assets in China. In 2013, Carlsberg took the lead in promoting the high-end strategy in the industry after becoming the master of heavy beer. It has experienced four stages: making up for the short board in 13-15 years, accelerating the high-end in 16-19 years, Carlsberg's restructuring and landing in 20 years, and USSR's popularity and opening up the national space.
The high-end wave of China's beer industry is expected to accelerate in the next three years. With the aging population and saturated per capita consumption, China's beer production has peaked and dropped since 2013. Driven by the upgrading of consumption on the demand side, the decline of cost-effectiveness ratio of supply side enterprises and profit pressure, the industry has reached a consensus on high-end since 2018. From the perspective of high-end rhythm, since 2018, the past deficiencies of leading manufacturers in product matrix, channel resources and brand operation experience have been gradually supplemented, and the high-end process is expected to speed up in the next three years; In terms of high-end space, according to our calculation, the revenue space of China's beer industry will reach 208.1 billion yuan in the next 5-10 years, 42% of the capacity expansion space compared with 2020. At the same time, high-end will be more flexible to profit release. Assuming that the net interest rate reaches 20%, the profit space will be 41.6 billion yuan.
Ussu has a clear national strategy, strong brand potential and sufficient growth momentum in the future. Wusu products have the characteristics of big stamina and large capacity. The bottle body has a tiktok logo marked "nsnm". Consumers voluntarily give it the nickname "big Wusu" and broadcast by short video platform such as jitter. Under the word of mouth marketing, 2019H2 has become the national net red brand. Driven by high brand potential energy and high channel profit margin, the volume is increased rapidly. We believe that Carlsberg has a clear high-end strategy for ussu and rich experience in brand channel operation. After cutting into the blank market with strong brand potential, Carlsberg is expected to release brand dividends through high channel profit margin. At present, there is still much room to improve the penetration rate of ussu in 61 large and medium-sized cities. We are optimistic about the growth of ussu in the next 3-5 years.
1664. Summer fun has great growth potential, and the upgrading of local strong brand structure contributes to profit elasticity. 1) In terms of international brands, 1664 is Carlsberg's ultra-high-end price potential product, focusing on French style and positioning female white-collar groups. At present, it has a high market rate in night channels and strong brand pull. In the future, with the release of capacity bottlenecks and channel expansion, it has great growth potential; Cider brands summer fun and 1664 have strong synergy in the supermarket channel, which is a potential growth point; 2) The market share of local strong brands in their respective regions is at a high level, and the total amount has become saturated. The future growth comes from the upgrading of high-end products.
Investment suggestion: the company is a pioneer in the high-end of China's beer industry. We are optimistic about the high-end playing method of Carlsberg Wusu. With the continuous expansion of large and medium-sized cities, it is expected to be rapid and large-scale under the strong brand pull and channel push, and there will be sufficient growth momentum in the next 3-5 years. It is estimated that the company's net profit attributable to the parent company from 2021 to 2023 will be RMB 1.198/14.95/1.800 billion, with a year-on-year increase of + 42.6% / + 24.8% / + 20.4% (the net profit attributable to the parent company in 2020 adopts the comparable caliber of the pro forma statement, which is RMB 840 million), corresponding to eps2 47 / 3.09/3.72 yuan. Considering the high ceiling and 1664 and other ultra-high-end brands outside wusujiang are expected to relay, and continuously raise the company's high-end space, give 50 times PE in 2023, with a target price of 186.0 yuan, 29% higher than the closing price on January 4, 2021, and give a "recommended" rating for the first time.
Risk warning: the nationalization of USSR is not as expected; 1664 promotion was not as expected; The cost of raw materials such as barley and packaging materials rose higher than expected; Industry demand is lower than expected; Industry competition intensifies; Food safety risks.
