\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) Tsingtao Brewery Company Limited(600600) 600)
Event:
The company released its annual report for 2021, and achieved a revenue of 30.167 billion yuan in 2021 (the same as + 8.67%); The net profit attributable to the parent company is RMB 3.155 billion (the same as + 43.34%); Deduct non net profit of RMB 2.207 billion (the same as + 21.54%); EPS2. 33 yuan / share; The company plans to pay a cash dividend of 1.10 yuan (including tax) per share.
Key investment points:
1. The high-end logic continues to be fulfilled, and the performance of Hebei + northeast provinces is strong. In 2021, the company overcame the impact of rising costs, demand damage caused by repeated epidemics, rain and other factors, the product structure continued to upgrade steadily, the main brand of Tsingtao Beer continued to grow steadily, and the high-end logic continued to be fulfilled. 1) In terms of brands, the product structure has been continuously optimized, and the main brand of Tsingtao beer has continued to increase rapidly: in 2021, the beer business achieved a revenue of 29.673 billion yuan (the same as + 8.5%), and the sales volume and ton price increased by 1.4% and 7.0% respectively year-on-year; The optimization of product structure drives the increase of ton price. In 2021, the sales volume of Qingdao’s main brands was 4.33 million tons (the same as + 11.6%), of which the sales volume of high-grade and above products (i.e. pure raw beer, white beer, Aogute and above categories) was about 520000 tons (the same as + 14.2%), and the sales volume of medium and low-grade products dominated by regional brands such as Laoshan, Hans and yinmai was about 3.6 million tons (the same as – 8.7%). 2) In terms of sub regions, the base market is stable, and Hebei + the three eastern provinces are strong: the company further consolidated the base market along the Yellow River, and it is expected that Shandong, Shaanxi and other provinces with large profit contribution will perform steadily, and the product structure of Hebei market will improve rapidly; At the same time, the three northeastern provinces have implemented differentiated competition and arranged in advance to seize the price band of more than 8 yuan. It is expected to benefit from the trend of consumption upgrading in recent years; Henan market volume is affected by the epidemic and rain, and the sales volume is expected to decline slightly; Overall, in 2021, the company’s revenue in Shandong / North China / South China / East China market was RMB 19747 million, RMB 7275 million, RMB 3367 million and RMB 2792 million respectively, with a year-on-year increase of + 9.55% / + 12.10% / + 2.99% / – 0.39% respectively.
2. The profitability has been steadily improved, and the cost pressure is relatively controllable. In 2021, the net interest rate of the company is the same as + 2.53pct to 10.46%, and the net profit deducted from non return to parent is the same as + 0.77pct to 7.31%. The non recurring profits and losses mainly come from 1) investment income and income from changes in fair value obtained from handling structured deposits and interbank certificates of deposit; 2) After confirming the compensation for land expropriation, the company obtained an asset disposal income of about 480 million. The company’s profitability increased steadily, mainly driven by the growth of gross profit margin (the company’s accounting policy changed in 2021, and the transportation cost was included in the operating cost. The gross profit margin under the new standard was the same as + 1.38pct to 36.7%; after being restored according to the 2020 standard, the gross profit margin was the same as + 1.88pct to 42.3%). Under the upgrading of product structure, the company’s ton price increased by 7% year-on-year; On the other hand, the company has excellent cost control ability. After reduction, the cost per ton increased by only about 4% year-on-year, which is at a low level in the industry. In addition, the company’s expense rate is stable, with the sales expense rate ranging from + 0.71pct to 13.58% (after reduction, the sales expense rate ranging from + 1.20pct to 19.16%), and the management expense rate ranging from -0.43pct to 5.61%.
3. Profit forecast and investment rating: in the short term, the company’s sales volume will continue to increase from January to February 2022. Although the repeated epidemic in March has an adverse impact on the pace of industrial recovery, the current beer industry is still in the off-season. In the future, with the tightening of epidemic prevention and control, the industry may usher in replenishment in the peak season. At the same time, the company has excellent cost control ability, and the implementation of price increase and structural upgrading will also effectively hedge the cost pressure. In the long run, the company has basically formed a complete localized high-end product matrix and national channel network, with outstanding brand strength. We believe that the long-term high-end trend of the company will not change even if it is affected by factors such as damaged demand and increased cost in the short term. After the equity incentive scheme is launched in 2020, the improvement of the company’s internal operating efficiency is also expected to be promoted at a faster speed. It is estimated that the company’s EPS from 2022 to 2024 will be 2.49/2.96/3.56 yuan respectively, and the corresponding PE will be 31 / 26 / 22 times respectively, giving a “buy” rating.
4. Risk tips: 1) repeated epidemics lead to the inhibition of consumption; 2) Increased market competition leads to increased costs; 3) The sharp fluctuation of economy leads to the decline of product price; 4) The pace of product upgrading is less than expected; 5) Food safety risks. In case of any difference between the relevant data and information and the contents published by the company, the contents published by the company shall prevail.
