\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) Tsingtao Brewery Company Limited(600600) 600)
Key investment points:
The growth momentum of the beer industry is switched to price rise, and there is still a long way to high-end. After 2013, China’s beer production and sales peaked and fell, but the average price of beer sales accelerated. From 2013 to 2019, the CAGR of beer sales was – 1.6% and the CAGR of sales ton price was 7.2%. The driving force of industry growth has changed from volume increase to price increase. The industry has entered a new period of high-end development, which is mainly driven by both supply and demand: on the supply side, long-term stock game leads to pressure on the profits of beer enterprises, and beer enterprises urgently need to find new growth breakthrough points; On the demand side, consumer demand is characterized by quality and branding, the consumption capacity continues to improve, and the consumption upgrading trend is obvious. At present, the high-end development path has become an industry consensus. The top beer enterprises are overweight in the layout of the high-end beer market. We believe that the high-end process of the beer industry is far from over and will continue for at least 3-5 years. Under the leading role of structural upgrading, the industry scale is expected to reach nearly 210 billion yuan in 2025, an increase of more than 41% compared with 2020, and the CAGR is about 7.1% during this period.
Tsingtao Brewery Company Limited(600600) has the strength to break through the high-end competition. Product innovation and quality upgrading are the basic conditions for shortlisted high-end venues. Only enterprises with strong brand and channel strength can lead the industry Tsingtao Brewery Company Limited(600600) has a deep accumulation in products, brands and channels, and its internal governance has been further improved in recent years. We believe that Tsingtao Brewery Company Limited(600600) has the strength to break through the high-end competition, and is expected to continuously realize self optimization and continue to lead the high-quality development of the industry under the guidance of the enterprise gene represented by innovation.
Adjusting structure + improving efficiency, Tsingtao Brewery Company Limited(600600) is in the upward profit cycle. 1. Structure adjustment: the company deeply implements the strategy of structure adjustment and high-end, and the proportion of medium and high-end products continues to increase, which will push up the average price; In addition, in the new industry competition environment, the normalized price increase of beer enterprises is expected to continue, accelerate the increase of average price and enhance profitability. 2. Improving efficiency: on the one hand, there is limited room for industry volume growth. The company will continue to promote the resolution of excess capacity and promote the improvement of operation efficiency; On the other hand, the investment cost will be refined, and the profitability will be improved. It is estimated that the gross profit margin / net profit margin of the company in 2023 will increase by 4.1pct/4.2pct compared with that in 2020.
Structural optimization and efficiency improvement bring profit elasticity, and performance elasticity and certainty support valuation. Under the recent emotional disturbance, the company’s valuation has fallen. At present, it has a high cost performance and maintains the Tsingtao Brewery Company Limited(600600) “recommended” rating. We estimate that the total operating revenue of the company from 2021 to 2023 will be 29.81/32.72/35.32 billion yuan respectively, with a year-on-year increase of + 7.4% / + 9.8% / + 7.9%; The net profit attributable to the parent company was RMB 3.15/3.21/4.21 billion respectively, with a year-on-year increase of + 43.0% / + 2.2% / + 31.1%; EPS is 2.31/2.36/3.09 yuan / share respectively. Considering that 1) there is still a lot of room for the company to achieve profit improvement through product structure upgrading and improving operating efficiency in the future; 2) The leading players in the beer industry have basically determined that Tsingtao Brewery Company Limited(600600) profitability will continue to improve under the wave of high-end. We give the intrinsic value of the company’s stock about 117 yuan / share through DCF valuation. Recently, under the disturbance of epidemic, inflation and other concerns, the company’s share price has dropped significantly. We believe that the medium and long-term logic of the company’s growth is clear and strong, the current valuation is attractive, and maintain the “recommended” rating.
Product structure upgrade: less than expected risk; Industry competition intensifies; The downward pressure on the macro economy has increased; Costs have risen sharply.
