Why is the valuation of beer enterprises so “expensive”. From the perspective of PE (price earnings ratio), beer valuation ranks first in the sub segment, which is mainly due to many factors affecting the apparent profitability of beer segment. The ratio of operating net cash flow to net profit attributable to parent company of beer enterprises is significantly better than that of other segments. The high price earnings ratio is more due to the great impact of apparent debt and depreciation expenses on the profitability of beer enterprises in the process of “horse racing enclosure” M & a development, At the same time, in recent years, it has become an industry consensus to improve the overall operating efficiency by closing the backward production capacity. Closing the factory will withdraw the asset impairment loss in the accounting statement of the current year, but it will significantly contribute to the increase of the net interest rate in the following years.
EV / EBITDA (enterprise multiple) is more suitable for the beer industry. EV / EBITDA (enterprise multiple) can consider the value of creditor’s rights at the denominator and exclude the impact of depreciation and amortization, interest expense and income tax at the numerator. Inside the forum, compared with the leading enterprises in condiment, Baijiu, dairy products and meat products, the companies with low asset liability ratio have a higher number of companies, but the high asset liability ratio has a comparable level of valuation. Beer taps, Tsingtao beer and heavy beer are equivalent to the valuation level of Yili and Zhong Ju from the perspective of EV/EBITDA. Compared with the listed companies in the beer industry, the internal valuation system of the section is relatively stable, the corresponding EV / EBITDA of enterprises with high profitability is stable at about 20 times, and the EV / EBITDA of enterprises with significantly improved profitability in recent years has accelerated upward
How to treat the seasonality of the share price of beer enterprises. In the average rise and fall data of the single quarter from 2015 to 2021, Q2 and Q4 beer enterprises mostly showed an upward trend, and Q2 increased significantly. At the same time, compared with Shanghai and Shenzhen 300, they also had excess returns, while Q1 and Q3 rose and fell each other, and the overall range was significantly smaller than Q2 and Q4. We believe that the seasonality of the share price of beer enterprises comes from: 1) the seasonality of the beer industry itself. After the dynamic sales entered the peak season, due to the high total market share of listed companies, Industrial monthly data has strong guiding significance, and channel research further strengthens the confidence of judgment; 2) The gradual change of views on the beer industry from the perspective of fund allocation. At present, the industry trend and secondary investment trend follow suit, and the fund gradually turns to over allocation. Q2 peak season and Q4 peak season of price increase are the focus of participating in the layout, resulting in fluctuations in the share price of beer enterprises.
How to treat the valuation elasticity of beer enterprises. In the short term, it is suggested to grasp the valuation elasticity of beer enterprises in peak season and the opportunity of China Resources oversold. It can be seen from the data of 20172021 that the valuation elasticity of beer enterprises is large. The low market value corresponds to about 30 times of PE in the current year and the high value corresponds to more than 50 times. Moreover, the low market value of the year mostly appears in Q1. At the same time, based on the current consistent expected performance of wind and the average valuation level of the past five years under the three conditions, the share price of China Resources beer has fluctuated sharply recently. The current market value is lower than the corresponding valuation level of the lowest market value in the past few years, with a strong margin of safety Tsingtao Brewery Company Limited(600600) and Chongqing Brewery Co.Ltd(600132) peak seasons can be expected, and the market value may rise by more than 50% under optimistic assumptions during the year. In the long run, the improvement of profitability and the brand value of beer enterprises are the basis for the steady improvement of market value. We should pay attention to the long-term trend changes of the industry and be optimistic about the leading beer enterprises.
Risk tip: the price rise of raw materials is higher than expected, the relevant calculation has limitations, the local epidemic repeatedly affects the recovery of consumption, and the industry competition intensifies
