\u3000\u3000 Tsingtao Brewery Company Limited(600600) (600600)
Event:
The company issued the announcement of performance increase in 2021, and it is expected to realize the net profit attributable to the parent company of about 3.15 billion yuan in 2021, with a year-on-year increase of about 43%; The net profit deducted from non parent company was about RMB 2.194 billion, with a year-on-year increase of about 21%.
Key investment points:
1. The performance is in line with expectations, and the company’s high-end trend remains unchanged. In 2021, the company realized a net profit attributable to the parent company of RMB 3.15 billion, which is expected to increase by about 43% year-on-year. If the impact of land compensation of about RMB 436 million is excluded, the performance is basically in line with the expectation. Considering the impact of land compensation, the company’s net profit attributable to the parent company in Q4 in 2021 was about 897 million yuan (loss of 777 million yuan in the same period in 2020), and the net profit not attributable to the parent company was about 1.022 billion yuan (loss of 862 million yuan in the same period in 2020). The year-on-year increase in loss in a single quarter is expected to be caused by the increase of cost pressure and the recognition of plant closure fees. On the whole, 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 its steady growth trend, and the high-end logic continued to be fulfilled. It is expected that the annual sales volume will maintain a low single digit growth year-on-year, and the ton price growth will accelerate.
2. The price increase in 2022 is expected to be implemented gradually, and the profit elasticity of the company may be accelerated. In view of the market’s concerns about rising costs and damaged demand, we believe that 1) the company has the ability to alleviate the upward pressure on costs through direct price increase and structural upgrading. In the past three quarters, even facing the pressure of rising costs, the company’s gross profit margin and net profit margin increased by 1.68 and 1.15 PCT year-on-year respectively. Since 2021h2, the price of some medium and high-end products of the company, such as Qingdao Chunsheng, has also increased in some regions. 2) The industry rebounded and recovered rapidly in the second quarter after being impacted by the epidemic in early 2020; Compared with 2020, China’s epidemic control ability has been greatly improved, and the consumption scenario will probably not disappear in a large area in the future. It is optimistic that terminal consumption will recover steadily in the peak season of 2022. On the whole, the price increase of the company’s products is expected to be further implemented in 2022, with high performance certainty; If the cost and demand side usher in marginal improvement, the company’s performance elasticity will accelerate the release.
3. Profit forecast and investment rating: 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 2021 to 2023 will be RMB 2.31/2.45/2.86 respectively, and the corresponding PE will be 43 / 40 / 35 times respectively. The company will be given a “buy” rating for the first time.
4. Risk tips: 1) repeated epidemic situation leads to consumption inhibition; 2) Increased market competition leads to increased costs; 3) Sharp economic fluctuations lead to a decline in product prices; 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.
