\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 132 Chongqing Brewery Co.Ltd(600132) )
Events
The company released the annual report of 2021: under the standard of preparation for examination, the company realized a revenue of 13.191 billion yuan (+ 19.90%), a net profit attributable to the parent of 1.166 billion yuan (+ 38.82%) and a net profit not attributable to the parent of 1.143 billion yuan (+ 76.14%) in 2021; Single Q4 achieved an income of 1.933 billion yuan (+ 1.08%), a net profit attributable to the parent of 122 million yuan (turning losses into profits), and a net profit not attributable to the parent of 117 million yuan (turning losses into profits).
Comments
Wusu has strong growth momentum and accelerated upgrading of high-end products
The growth rate of the parent company was 19.82% due to the slowdown of the epidemic, and the net profit of the parent company in 2024 was in line with the growth rate of q2.4%, which was in line with the expectation of q2.4. The main reasons for the high growth of performance in 21 years are as follows: 1) volume: in 2021, the beer sales volume was 2.7894 million kiloliters (+ 15.10%), of which the high-end / mainstream / economic sales volume was 66.15/161.45513400 kiloliters, with a year-on-year increase of + 40.48% / 10.6% / 4.14%. The proportion of high-end beer sales increased by 4.29 percentage points to 23.72%, the sales volume of Wusu increased by about 34%, the growth rate outside Xinjiang exceeded 40%, and the sales volume of 1664 increased by about 36% year-on-year Lebao achieved double-digit growth; 2) Price: thanks to structural upgrading and price increase, the average price in 2021 was 4703 yuan / kiloliter (+ 4.18%), of which the average price of high-end / mainstream / economy was 7077 / 4056 / 3126 yuan / kiloliter, with a year-on-year increase of + 2.13% / 0.16% / 6.23%. The average price led China’s major wine enterprises and maintained an upward trend year by year.
The plan for big cities has been steadily promoted, and many regions in the country have performed well
Under the guidance of the big city plan, the company has performed well in different regions of the country, and the nationalization has been further promoted. 1) The big city plan continues to advance: by the end of the year 21, the company has developed 61 big cities covering the whole country, and plans to continue to add 15 big cities in the year 22, mainly covering the markets of East China and South China. At the same time, the big city plan will be upgraded, and all big cities will promote the development of all channel and all brand combination. 2) National Regional multi-point flowering: in 2021, Northwest / central / southern regions achieved sales of 89.19 (+ 20.75%) / 122.14 (+ 12.19%) / 67.61 (+ 13.40%) million kiloliters in 2021, with an average price of 4701 (+ 3.72%) / 4353 (+ 1.29%) / 4919 (+ 12.84%) yuan / kiloliter. Sales in all regions achieved double-digit growth, and the average price in southern regions increased significantly.
Excellent cost and expense control and significantly improved profitability
In 2021, the gross profit margin of the company was 50.94% (+ 3.26pct), and the net profit margin attributable to the parent company (for reference) was 8.89% (+ 1.21pct). Among them, the gross profit margin of high-end / mainstream / economic beer increased by 0.21, 1.26 and 5.71pct respectively, mainly due to the decrease of 2.31% in ton cost in 21 years and 1.27/2.31pct in sales / management expense rate. Through global procurement, supply chain optimization, scale effect and price adjustment, the company has responded to rising costs, and its profitability is expected to continue to improve in 22 years. Specifically: 1) price increase: Wusu in and outside Xinjiang raised prices in September 21 and February 22 respectively, with a price increase range of about 3% – 8%. At present, the transmission of price increase is smooth; 2) Price locking: the price of barley has been locked for 22 years in 21 years, and the price locking cycle of packaging materials is short; 3) Upgrading of product structure: led by the high growth of Wusu and 1664, the proportion of high-grade beer sales increased by 4.29 percentage points in 21 years.
Short term: the performance of 22q1 mobile sales is excellent, and the main sales market is limited by the epidemic
In the short term, in the Spring Festival of 2022, the growth rate of mobile sales of beer is bright under the background of the increase of return rate. Although the epidemic situation has been repeated in China in March, the company’s main sales market is less affected by the epidemic situation. Specifically, 1) 22q1 Mobile sales performance is excellent: thanks to the increase of return rate and the strong development potential of Wusu, the company’s mobile sales growth from January to February is expected to be high in double digits, and the main sales markets in Chongqing, Xinjiang, Ningxia and other places in March are limited by the epidemic situation, Q1 is still expected to maintain medium double-digit growth and is expected to have a good start. 2) Gradual recovery of consumption in Xinjiang: Xinjiang was greatly affected by the epidemic in the first three quarters of 20 years, but the consumption in 21 years showed an obvious recovery trend, with an increase of more than 10% in Wusu territory in 21 years. In addition, the personnel of Xinjiang changed at the end of 21 years. After taking office, the new secretary of the Party committee of the autonomous region emphasized promoting the economic development of Xinjiang, and pointed out that Xinjiang has ushered in an important strategic opportunity period of high-quality economic development, The economic prosperity in Xinjiang is conducive to the accelerated development of USSR in Xinjiang.
Long term: the 27th sailing strategy has been implemented, and Wusu is still expected to maintain a high growth rate in 22 years
On February 3, Carlsberg group released the Yangfan 27 strategy. During the Yangfan 22 strategy, China became Carlsberg’s largest market in the world. The Yangfan 27 strategy emphasizes “continuing to succeed in China”. Specifically: 1) product side: strengthen high-end products, consolidate mainstream core beer and create a win-win product portfolio. Each Bu will formulate development plans according to local conditions; 2) Channel side: proficient in digital connection + end-to-end management of supply chain. The company will use digital to assist decision-making and optimize supply chain management. In addition, the company has established an independent e-commerce department, which will be an important development opportunity after the epidemic; 3) Market side: the company will be guided by creating more high profit base markets and accelerating the development of high potential markets. Among them, Xinjiang, Chongqing and Chengdu are high profit markets, and the Yangtze River Delta and Pearl River Delta are high potential markets.
Under the empowerment of product upgrading + structural optimization + precision marketing + price increase outside Xinjiang + capacity expansion, Wusu is expected to maintain high growth in 22 years: 1) product upgrading: at the beginning of the year, the company upgraded Wusu wheat white to Wusu white beer, and upgraded Wusu products in entertainment channels to new products with 330ml alcohol concentration of 4 degrees to meet consumers’ demands; 2) Structural optimization: focus on the development of hongwusu outside Xinjiang + extending the product line, and the product matrix is conducive to the development of Wusu’s omni-channel and multi consumption scenarios; 3) Precision marketing: Recently, Wusu announced that Wu Jing, as the spokesman of the new brand, strengthened the tone of “hard core” and maintained the popularity of the brand; 4) Price increase outside Xinjiang: Wusu in Xinjiang has raised its price in September, 21, and Wusu outside Xinjiang began to raise its price on February 1, 22, with a price increase range of about 3% – 8%, consolidating Wusu’s dominant position in the 10 yuan price band, and adding price locking measures for upstream raw materials to effectively alleviate the upward pressure on costs, which is expected to release performance flexibility in the peak season; 5) Capacity expansion: 130000 tons of Yancheng plant has been put into operation, and 500000 tons of Foshan plant will be started soon to alleviate the uneven distribution of capacity between the East and the West. The capacity expansion of Xichang plant will be completed within the year.
Profit forecast and valuation
We believe that the implementation of Yangfan 27 strategy is beneficial to the long-term development of the company, with limited impact of the epidemic in the short term. We pay attention to the epidemic control process. In the future, Chongqing Brewery Co.Ltd(600132) will benefit from the excellent performance of Wusu Beer, accelerated national expansion, coordinated development of multiple brands and continuous expansion of production capacity. It is expected that the revenue growth rate from 2022 to 2024 will be 18.0%, 15.2% and 14.6% respectively; The growth rate of net profit attributable to the parent company was 25.3%, 24.2% and 20.4% respectively; EPS is 3.0 / 3.8 / 4.5 yuan / share respectively; PE is 37 / 30 / 25 times respectively. In the long run, the performance has strong growth, the current valuation is cost-effective, and the buy rating is maintained.
Catalyst: the upgrading of consumption continues and the nationalization of USSR develops smoothly.
Risk tip: the epidemic situation in China broke out again, affecting the overall dynamic sales of beer; The situation of Wusu movable sales was less than expected.
