Beer: the ton price has accelerated upward, and the cost pressure is controllable
Volume and price: the sales performance is commendable, and the price increase and product structure optimization push up the ton price. From the perspective of the industry, Q4 is not light in the off-season, and the epidemic disturbance has made a good start from January to February. The beer industry output in 2021q4 increased by + 13.1% year-on-year to 6.383 million kiloliters. The beer output from January to February 2022 increased by + 3.6% year-on-year. However, the epidemic disturbance in March made the output of Q1 beer industry – 1.5% year-on-year; From the perspective of listed companies, the performance elasticity appears when the volume and price rise together. In 2021q4 / 2022q1, major beer enterprises achieved revenue of 7.78/17.14 billion yuan, with a year-on-year increase of + 9.5% / 8.0% respectively. Driven by the rise of revenue volume and price, Q4 significantly reduced losses, Q1 performance increased, and the net profit attributable to the parent company was + 33.5% / 20.6% year-on-year respectively. Specifically, the short-term epidemic is still the core factor affecting sales, but the ton price shows an accelerated upward trend. It is expected that the ton price will achieve high single digit growth throughout the year.
Cost & expense: the pressure margin slows down and needs to be observed during the year. On the cost side, except that the glass price is significantly lower than the high point in 2021, barley, corrugated paper and aluminum are at a relatively high point. However, according to our model calculation, the current cost rise rate of the beer industry continues to decline, and the current cost year-on-year pressure is nearly 2018. It is expected that all enterprises will adopt the method of “open source + throttling” to deal with the cost pressure. From the perspective of listed companies, the cost pressure continues and Q1 continues to appear. It is expected that the price increase plus high-end will help enterprises cope with the rising cost; On the performance side, Q4 losses narrowed and profitability improved at the right time. 2021q4 heavy beer turned losses and Yanjing reduced losses. The profitability of major beer enterprises in 2022q1 did not decline significantly, Beijing Yanjing Brewery Co.Ltd(000729) further turned losses, and the improvement of profitability is still the main line of the industry in the future.
Future outlook: epidemic situation and cost change are the core variables. We expect that the rise of ton price in the beer industry is a high probability event, which helps enterprises offset the cost pressure. At the same time, the epidemic situation and cost are the core variables throughout the year. 1) Epidemic situation is the core variable of revenue: as the weather turns warmer and the mobile sales of beer are about to enter the peak season, we should pay attention to the time of repeated marginal improvement of epidemic situation and the elasticity brought by subsequent “compensatory” consumption; 2) Cost is the core variable of performance: considering the operating characteristics of beer enterprises, it is expected that all enterprises will take measures to lock in the price of barley, but their bargaining power for packaging materials is low. If the cost of H2 packaging materials decreases more than expected or brings performance flexibility, it is necessary to continue to pay attention to the cost.
Beverages: short-term suppression, long-term is preferred
The year 2021 witnessed a high recovery growth, and the differentiation is expected to intensify in 2022. In 2021, thanks to the marginal slowdown of the impact of epidemic control, all beverage enterprises started “restorative” growth. From the perspective of two-year compound growth rate, some high-quality beverage enterprises still achieved high growth. The epidemic situation recurred again and again in 2022. Considering that it is difficult to realize “compensatory” consumption after the epidemic of beverage products, and the cost pressure appears to suppress the profitability of beverage enterprises, it is suggested to pay attention to the good companies in the good track, arrange the high elastic enterprises after the impact of the epidemic and the cost pressure have slowed down after the valuation has fallen to a reasonable level, and give priority to Eastroc Beverage (Group) Co.Ltd(605499) .
Risk tip: the repeated impact of the epidemic exceeded expectations, the price rise of raw materials exceeded expectations, and food safety problems.
