\u3000\u3 Bohai Water Industry Co.Ltd(000605) 499 Eastroc Beverage (Group) Co.Ltd(605499) )
Event description
In 2021, the company realized an operating revenue of 6.978 billion yuan, an increase of 40.7% and a net profit attributable to the parent company of 1.193 billion yuan, an increase of 46.9% and EPS of 3.11 yuan. In 2022q1, the operating income was 2.007 billion yuan, an increase of 17.3% and the net profit attributable to the parent company was 345 million yuan, an increase of 0.8% and EPS was 0.86 yuan.
Event comments
In 2021, with the promotion of nationalization, the performance increased as scheduled, and the growth rate slowed down slightly in 2022q1 disturbed by the epidemic. In 2021, with the smooth promotion of the company’s large single product strategy, the company’s performance increased rapidly at a growth rate of four times that of the industry. Among them, 500ml gold bottle achieved a revenue of 5.02 billion yuan, a year-on-year increase of 62.8%, and the proportion increased by 14pct to 76.2%. In terms of sub regions, benefiting from intensive cultivation through all channels, the local port of Guangdong achieved a revenue of 3.2 billion yuan, an increase of 29.7% at the same time. With the steady development of outlets outside the province and the gradual increase of individual outlets after the cultivation period, the revenue reached 3 billion yuan in 2021, an increase of 53.6% at the same time. Among them, East China and southwest China performed well, with an increase of 79.1% and 65.4% respectively. By the end of 2021, the number of distributors of the company had reached 2312, covering 2.09 million terminal outlets, an increase of 44.5% / 74.2% respectively compared with 2020. The effect of nationalization was remarkable, and the proportion of Guangdong region further decreased to 45.9%. In terms of cash flow, in 2021, the company achieved a collection of 8.36 billion yuan, an increase of 33.4%, matching the growth rate of the revenue side, mainly due to good terminal dynamic sales and low channel inventory. 22q1 Guangdong / national marketing / national direct marketing headquarters achieved revenue of 785 million yuan / 1036 million yuan / 179 million yuan respectively, with a same increase of 7.1% / 25.6% / 19.9%. The growth rate decreased slightly, mainly due to the repeated impact of epidemic diseases in some areas on logistics transportation and some consumption scenes.
The operating efficiency has improved steadily, and the gross sales difference has gradually expanded. In 2021, the company’s gross profit margin was 44.4%, with a year-on-year increase of 0.5pct. Excluding the impact of reclassifying transportation expenses to operating costs due to changes in accounting policies, the gross profit margin increased by 0.7pct to 47.3% year-on-year, mainly due to the continuous increase in the proportion of 500ml gold bottles, and the company locked the price of polyester chips of main raw materials in advance. 22q1 due to the depletion of low-cost raw materials, the procurement cost increased significantly, and the gross profit margin decreased by 3.1pct to 43.2%. In 2021 and 22q1, the sales expense rate was 19.6% / 16.8% respectively, with an increase of 1.4pct/0.5pct, mainly due to the increased publicity and promotion efforts of listed companies, including the release of advertisements, promotional films and freezers, as well as the increase of the salary of salespeople, and the management expense rate remained stable. On the whole, the rapid increase of revenue combined with digital driven lean management has gradually highlighted the scale effect of the company. The amplification of gross sales difference has driven the net profit margin of the company to increase by 0.72 PCT to 17.1% in 21 years.
In the future, the idea of nationalization will become clearer and more multi-dimensional forward-looking layout. In 2021, the company will seize the opportunity of listing and carry out all-round strategic layout. Looking forward to the future, we believe that with the steady progress of nationalization, 500ml gold bottle is still in the high-speed release period of brand dividend and will continue to increase in large quantities. It is expected that with the continuous improvement of energy + product matrix, it is expected to cultivate a “second growth curve” and contribute new increment; In terms of channels, relying on the Internet, the company upgraded to “five code correlation” on the basis of “four code correlation”, realized channel integration and accurate management of all channels, and greatly improved work efficiency; In terms of production capacity, by the end of 2021, the company has built seven production bases and realized the design production capacity of 2.365 million tons. The production capacity has been greatly improved. The improvement of superposition production line efficiency and capacity utilization will lay a solid foundation for the nationalization of the company.
Maintain the company’s “buy” rating. We continue to be optimistic about the future growth of the company. Affected by the epidemic in some areas, we slightly lowered our previous profit forecast. It is expected that the EPS of the company in 20222024 will be 3.43 yuan, 4.37 yuan and 5.35 yuan respectively (3.95 yuan and 4.95 yuan respectively in the previous 22-23 years), maintaining the “buy” rating.
Risk tips: 1. The dispute over red bull’s trademark fell to the ground, and China Red Bull continued to have the right to use the trademark, resulting in intensified market competition. 2. The company’s nationwide expansion was less than expected, and the terminal mobile sales slowed down. 3. The change of people’s living habits led to the consumption scene of energy drinks, the consumption frequency was not as expected, and the growth rate of the industry slowed down. 4. The fluctuation of raw material costs exceeded expectations
