\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) Tsingtao Brewery Company Limited(600600) 600)
Event: the company released its annual report for 2021. During the reporting period, the company achieved an operating revenue of 30.167 billion yuan, a year-on-year increase of 8.67%; The net profit attributable to the parent company was 3.155 billion yuan, a year-on-year increase of 43.34%; Deduct non net profit of RMB 2.207 billion, with a year-on-year increase of 21.54%. Among them, the operating revenue of 21q4 was 3.395 billion yuan, a year-on-year increase of 1.73%; The net profit attributable to the parent company was -455 million, with a year-on-year loss of 321 million yuan; Deducting non net profit of -1.009 billion yuan, the year-on-year loss increased by 147 million yuan. Basically in line with expectations.
Key investment points
The product structure continued to improve, and Shandong / North China achieved high growth. In 2021, the company achieved 7.93 million kiloliters of beer sales, a year-on-year increase of + 1.38%; Affected by the epidemic in the second half of the year, the sales volume of 21h2 / Q4 was – 7.41% / – 3.42% year-on-year, resulting in a slightly lower annual sales growth. By brand, the sales volume of Qingdao’s main brands reached 4.329 million kiloliters, a year-on-year increase of + 11.62%, accounting for 54.59%; Other brands were affected by the epidemic and extreme weather, with year-on-year sales of – 8.68%. In terms of ton price, the average ton price of beer of the company in 21 years was 3742 yuan / ton, with a year-on-year increase of + 7.03%, of which the ton price of Qingdao brand / other brands was + 2.85% / + 7.13% respectively. In terms of regions, in the past 21 years, the company achieved revenue of 19.747/7.275 billion yuan in Shandong and North China, a year-on-year increase of + 9.55% / + 12.10%; The revenue of Southeast China and overseas regions made a good breakthrough, realizing an income of 891 / 644 million yuan, a year-on-year increase of + 8.31% / 14.64%.
Under the high-end, the gross profit margin increased steadily, the cost reduction and efficiency increase, and the net profit margin performed brilliantly. In 2021, according to the new accounting standards (transportation expenses transferred from sales expenses to operating costs), the company’s gross profit margin was 36.73%, a year-on-year increase of + 1.28pct. Although the cost side was under pressure in 2021, the company responded positively by accelerating the high-end process and raising prices, and the annual gross profit margin made steady progress. The net profit margin of the company in the 21st year was 10.46%, with a year-on-year increase of + 2.53pct. In addition to the increase of gross profit margin, in the face of the dual challenges of epidemic situation and cost pressure, the company continued to optimize the management system and improve the operation efficiency. The management expense rate was -0.43pct year-on-year, realizing a steady increase in the net profit margin. We believe that with the gradual release of price increase dividends, the gradual stabilization of the epidemic, the recovery of consumption and the continuous improvement of the proportion of high-end products, the profitability of the company will maintain good growth.
The short-term epidemic disturbance in 22 years is expected to enjoy the price increase dividend throughout the year. In 2021, in order to cope with the pressure of rising costs, the company raised the price of the main line products dominated by pure raw and white beer in different regions and time periods across the country. From the dynamic sales of the Spring Festival in 2022, the transmission of price increase is relatively smooth. We believe that under the influence of the conflict between Russia and Ukraine, the cost side is relatively under pressure. In the future, the company can effectively hedge the cost pressure through product structure upgrading and price increase, so as to drive the improvement of profitability. We expect that when the price of raw materials turns to an inflection point, the price increase dividend will be fully released, so as to accelerate the improvement of the company’s profitability.
Investment suggestion: the company’s product structure has been steadily improved, and the price increase and upgrading of various brand products have been smoothly promoted. We are optimistic about the company’s long-term development in the high-end process of the beer industry. We predict that the company’s operating revenue will be 32.835/35.318/37.792 billion yuan from 2022 to 2024, with a year-on-year increase of 8.8% / 7.6% / 7.0%. The net profit attributable to the parent company was RMB 3.3423998/4.605 billion, with a year-on-year increase of 5.9% / 19.6% / 15.2%. The corresponding EPS is 2.45/2.93/3.38 yuan respectively. Considering that the company is a leader in China’s beer industry, the company was given a 22-year pe35x valuation and maintained the company’s “Buy-A” rating.
Risk tips: product upgrading is less than expected, industry competition intensifies, and raw material prices rise more than expected.
