\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) Tsingtao Brewery Company Limited(600600) 600)
Remarkable high-end results and enjoy industry dividends
It is estimated that the company’s revenue from 2021 to 2023 will be 30.325 billion yuan, 32.666 billion yuan and 34.566 billion yuan, with a year-on-year increase of 9.2%, 7.7% and 5.8%. Considering the structural improvement and hedging such as raising the price of raw materials, the gross profit margin is expected to increase slightly and the expense rate is expected to decrease steadily. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 3.150, 3.707 and 4.543 billion, with a year-on-year increase of 43.1%, 17.7% and 22.6%. The current price corresponds to 37.1, 31.6 and 25.7 times of PE from 2021 to 2023. It will benefit from the upgrading of consumption in the industry and the continuous improvement of the pattern. The company’s high-end strategy has achieved remarkable results, and the profit is expected to gradually release flexibility. It will be rated as “overweight” for the first time.
The industry has entered a high-quality development stage
Since 2016, China’s beer demand has gradually stabilized, bid farewell to the era of rapid expansion, and the industry has entered a high-quality development stage focusing on business efficiency improvement and structural upgrading. In 2020, on the one hand, under the stock competition, the pattern is stable and gradually improved, leading factories are closed to improve efficiency, small and medium-sized breweries withdraw from the market, and the burden of industrial capacity is cleared; On the other hand, with the upgrading of beer consumption and the rise of young consumer groups, the capacity of high-end beer market continues to expand. Leaders have taken the initiative to promote high-grade products, and the overall profits of the industry have been released at an accelerated pace.
High end products and continuous upgrading of base Market
The company has a multi-level product system and forms a “1 + 1” brand strategy focusing on Qingdao and Laoshan. The company continues to improve its product structure, promote the upgrading of sub brands to main brands, and focus on high-end brands above Qingdao classics. At the same time, the company has stepped up the development of high-end new products (white beer, IPA, etc.) and the process of brand rejuvenation, signed top-notch musicians, reshaped product image design, and created a new image of youth and national fashion. At the same time, in the advantageous markets such as Shandong and Shaanxi in the north, the company has a large market dominance, but the product structure has always been low, and there is a lot of room for continuous upgrading in the future.
Revitalize the mechanism and improve incentives
As the first a + H-share listed company in China, the incentive mechanism will be improved in 2020. On the one hand, with the opportunity of Fosun’s shareholding in the mixed reform, the company fulfilled its equity incentive commitment, and the enthusiasm of the management and middle-level was significantly improved. On the other hand, increase the cash incentive for front-line sales staff, build an incentive mechanism oriented by high-end and structural upgrading, improve the enthusiasm of front-line staff and promote the company’s high-end strategy.
Risk tip: the risk of continued weak catering demand, rapid rise in costs and intensified competition
