\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 29 Beijing Yanjing Brewery Co.Ltd(000729) )
U8 meets the inflection point of high-volume and eye-catching improvement of business efficiency. Yanjing U8 is the core single product of the current company, with strong product strength, high consumer recognition and rapid sales growth. In 2021, the sales volume of Yanjing U8 is about 260000 tons. In the long run, with the rapid expansion of the price band of 8-12 yuan, the volume of U8 is expected to exceed one million tons. Previously, Yanjing was trapped in a huge organizational structure, and some loss making factories had a great drag on the company's profits. At present, the company is promoting the adjustment of organizational structure: clarifying the functions of the headquarters and refining the management; And continuously optimize capacity utilization through plant closure and efficiency increase. We believe that with the continuous improvement of U8 volume + operating efficiency of large single products, Yanjing is expected to rejuvenate and welcome development.
The Reviver of the past Beijing Yanjing Brewery Co.Ltd(000729) as a national beer manufacturer, it is one of the leaders in China's beer industry. Focusing on the three base markets of Beijing, Inner Mongolia and Guangxi, the company implements the brand strategy of "Yanjing main brand + Liquan, Xuelu and Huiquan three sub brands": from 2015 to 2019, Yanjing main brands accounted for more than 65% of the total, and "1 + 3" four brands accounted for more than 92% of the total. In terms of products, the company seeks to upgrade the product structure through medium and high-end new products such as Yanjing U8, white beer V10 and Liquan 1998. Yanjing U8 is the main core single product of the company. The growth of U8 comes from the deep cultivation of regional channels in Beijing and the promotion of product nationalization.
The reform has achieved remarkable results and entered a new stage of rapid development. The five-year strategic goal reform started in 2019 has achieved initial results, and the company's profitability has continued to improve. At the regional end, the company took the lead in launching medium and high-end new products in the three base markets to ensure the smooth implementation of product structure upgrading and consolidate the profit pool. On the brand side, the sales volume of Yanjing's main brand has shrunk, the company has made efforts to make breakthroughs in the high-end, and the subsidiaries where the sub brand is located have made overall adjustment for the better, and the sales volume has stopped falling and rebounded since 2018; The medium and high-grade Yanjing U8 and Liquan 1998 have begun to gradually increase their volume, which is expected to improve the downward trend of Yanjing's main brands and enhance the profitability of brands.
Reduce cost and increase efficiency and improve profitability. The company is adjusting its organizational structure and moving forward to refined management. Under the reform of large department system, the company has established a number of comprehensive centers, and set up functional departments to connect with subsidiaries for supervision and inspection, so as to make the management more refined by clarifying the functions of the headquarters. The company has established a support mechanism in vulnerable areas to help many subsidiaries reduce losses significantly Beijing Yanjing Brewery Co.Ltd(000729) in the past, the human efficiency / plant efficiency was low. In 2020, the capacity utilization rate was less than 40%, far lower than the industry level of 67%. The per capita output was only 12600 tons, so there was a large room for optimization. At the end of 2021, the company began to launch the early retirement plan for production end employees, which is expected to greatly improve the company's human efficiency in 1-2 years.
Profit forecast, valuation and rating: Beijing Yanjing Brewery Co.Ltd(000729) is one of the top beer brands in China. With the help of the rapid and large volume of large single product U8, it is expected to achieve performance growth beyond expectations. In addition, the company has a large space to reduce costs and increase efficiency, and the profit has a certain elastic space. We predict that the company's net profit attributable to the parent company from 2022 to 2024 will be RMB 334 / 446 / 557 million respectively, equivalent to EPS of RMB 0.12/0.16/0.20 from 2022 to 2024 respectively. The current share price corresponds to PE of 57x / 43x / 34x from 2022 to 2024, which is covered for the first time and rated as "overweight".
Risk warning: the cost of raw materials rises faster than expected; Intensified regional competition; The expansion of large single products is lower than expected; The epidemic lasted longer than expected.
