Through the major asset restructuring in 2020, Chongqing Brewery Co.Ltd(600132) ( Chongqing Brewery Co.Ltd(600132) , SH; previous closing price of 112.16 yuan) has advanced from a regional beer enterprise to a national beer enterprise.
On the evening of April 1, 2022, Chongqing Brewery Co.Ltd(600132) released the annual report of 2021. During the reporting period, the sales volume, revenue and net profit attributable to the shareholders of the listed company all increased. One of the important driving forces for growth is the company’s high-end strategy.
At present, China’s beer industry has entered the “stock market”. Coupled with repeated epidemics, rising raw material prices and other factors, the development of the beer industry is facing many challenges. In this case, high-end has become the main direction of the development of beer enterprises, and there are even thousands of yuan of sky high price beer in the market.
Under the multiple challenges, Chongqing Brewery Co.Ltd(600132) how to tell the high-end story well, and how far will the high-end strategy help the company go?
last year, the income of high-end products exceeded 30%
At the end of 2020, Chongqing Brewery Co.Ltd(600132) completed major asset restructuring, and Carlsberg will inject all high-quality beer assets in China into Chongqing Brewery Co.Ltd(600132) . As a result, Chongqing Brewery Co.Ltd(600132) not only became the only platform for Carlsberg to operate beer assets in China, but also grew from a regional beer company to a national beer enterprise.
After completing the reorganization and achieving scale upgrading, what are the achievements of Chongqing Brewery Co.Ltd(600132) 2021?
On April 1, Chongqing Brewery Co.Ltd(600132) released the 2021 annual report, which showed that in 2021, the company achieved 2.7894 million kiloliters of beer sales, with a year-on-year increase of 15.10%; The operating revenue was 13.119 billion yuan, a year-on-year increase of 19.90%; The net profit attributable to the company’s shareholders was 1.166 billion yuan, an increase of 8.30% over the same period last year (statutory disclosure data) of 1.077 billion yuan.
Chongqing Brewery Co.Ltd(600132) 2021 sales volume, revenue and net profit growth are related to the promotion of the company’s high-end strategy.
According to the financial report, in 2021, the sales volume and revenue of the company’s high-end products increased by 40.48% and 43.47% year-on-year respectively, which significantly exceeded the growth of mainstream and economic products. ( Chongqing Brewery Co.Ltd(600132) according to the consumer price, the product grade is divided, and more than 10 yuan is high-grade, 6 ~ 9 yuan is mainstream, and less than 6 yuan is economic)
In this case, in 2021, the sales revenue of Chongqing Brewery Co.Ltd(600132) high-end products reached 4.682 billion yuan, accounting for 35.69% of the company’s revenue. Compared with 29.82% in the same period last year, it increased by about 5.87 percentage points.
Chongqing Brewery Co.Ltd(600132) the reason why we vigorously promote the high-end strategy is related to the current situation of the whole beer industry. According to the analysis of Chongqing Brewery Co.Ltd(600132) 2021 annual report, after the output reached the peak in 2013, China’s beer industry entered a decline cycle. Statistics show that in the eight years from 2014 to 2021, except for a slight increase in 2018, 2019 and an increase of 5.60% in 2021, the output in the other five years declined. Compared with 2013, the output in 2021 decreased by 29.61%.
thousand yuan beer is a high-end direction
The beer industry is moving towards high-end, and major well-known beer enterprises are competing for layout.
In addition to Chongqing Brewery Co.Ltd(600132) , at present, the top five beer enterprises in China also include China Resources beer, Tsingtao Brewery Company Limited(600600) , Budweiser Asia Pacific, Beijing Yanjing Brewery Co.Ltd(000729) . Recently, the annual report of Tsingtao Brewery Company Limited(600600) 2021 shows that during the reporting period, the sales volume of Tsingtao Brewery Company Limited(600600) high-end and above products was 520000 kiloliters, with a year-on-year increase of 14.2%, and the operating revenue of the company’s kiloliter wine increased by 7.2%, maintaining its competitive advantage in China’s medium and high-end beer market. At the beginning of 2022, the super high-end art collection product Tsingtao Brewery Company Limited(600600) “Legend I” newly developed and listed by the company continued to lead the consumption upgrading of China’s beer industry to a new height.
On April 2, at the official flagship store of Tsingtao Brewery Company Limited(600600) Taobao, Tsingtao Brewery Company Limited(600600) Centennial journey legend 23.9 degrees 1.5L sold for 1399 yuan a bottle. In fact, not only Tsingtao Brewery Company Limited(600600) , but also brands such as China Resources and Budweiser have successively launched thousand yuan beer products.
More than 10 yuan has been regarded as high-grade beer, but the enterprise has achieved the price of more than 1000 yuan. Is sky high price beer or super high-end beer the direction of high-end beer? It is worth noting that beer is not stored for long as Baijiu, and there is a view in the market that the thousand yuan beer is “IQ tax”.
In an interview with the daily economic news, Zhu danpeng, an analyst of China’s food industry, said that for 1000 yuan beer, enterprises may not pay so much attention to sales, but only use it as a gimmick of brand marketing.
In August 2021, Chongqing Brewery Co.Ltd(600132) president Li Zhigang said in an interview that if there is a demand for high-priced beer in the market, he would also consider it, “but there is no idea of selling 1000 yuan or 100 yuan a bottle of beer at present”.
In any case, thousand yuan beer has appeared. To what extent will the high-end beer develop in the future? According to the recent analysis, the sales volume of high-end beer of Anyan securities accounted for 11% in 2020. It is estimated that by 2025, the sales volume of high-end beer will account for 14% and the sales volume will account for 41%.
In 2021, the sales revenue of Chongqing Brewery Co.Ltd(600132) high-end products accounted for 35.69% of the revenue. How will the company promote the high-end strategy in the future? On April 2, Chongqing Brewery Co.Ltd(600132) replied to the reporter of the daily economic news that the proportion of the company’s high-end products in the product portfolio still lags behind the international level. In the future, the company will continue to promote the high-end strategy and further improve the proportion of high-end products.
Chongqing Brewery Co.Ltd(600132) also said that the company has a “6 + 6” brand combination of “international high-end brand + local strong brand”. Based on this brand combination, on the one hand, the company can upgrade its existing products to achieve high-end; On the other hand, we can also continuously launch new high-end products.
raw material price rise tests coping ability
Not only has the industry entered the era of stock, but also the beer industry is facing the pressure of the repeated impact of the epidemic on consumption and the rise of raw material prices.
According to the analysis of the Research Report of Puyin international in January this year, the price of beer raw materials has risen again on a large scale since the second half of 2020. In 2021, the price of imported barley increased by 23.4%, the price of aluminum increased by 40.2%, and the price of corrugated paper increased by more than 20%.
The rise in the price of raw materials will undoubtedly push up the cost of beer enterprises.
In 2021, Chongqing Brewery Co.Ltd(600132) in the manufacturing industry of wine, beverage and refined tea, the raw material cost was 4.13 billion yuan, accounting for 66.15% of the total cost, an increase of 5.37 percentage points compared with 60.78% of the previous year.
In 2022, the cost of beer raw materials will rise further. According to the Research Report of Puyin international on March 9, as Ukraine is an important crop exporter, the situation in Russia and Ukraine has not only led to the rise in the price of crude oil and crude oil products, but also caused the sharp rise in the price of crops (including wheat, barley, corn, etc.). Since mid February, the price of barley in the main raw materials of the beer industry has increased by 23%. On the other hand, the price of aluminum has also increased by 16% since mid February.
Under the pressure of rising raw material prices, Chongqing Brewery Co.Ltd(600132) how to deal with it? The company replied that it had made preparations in advance in 2021 and locked the quantity and price of most raw materials. At the same time, during the bidding process, the company also conducted more price comparison to absorb the pressure caused by the price rise of some raw materials and packaging materials; At the same time, we should deal with the pressure brought by the rise of overall cost by increasing cost saving and improving efficiency; In addition, the continuous growth of sales volume has produced a greater scale effect, making the amortization of fixed costs offset some of the impact of rising costs.
Chongqing Brewery Co.Ltd(600132) also said that when the above three measures can not absorb the pressure caused by rising costs, the company also absorbs part of the rising costs through price adjustment. ” Chongqing Brewery Co.Ltd(600132) ‘s price adjustment strategy is to promote according to different channels, regions and brands.”
