\u3000\u3 China Vanke Co.Ltd(000002) 568 Shanghai Bairun Investment Holding Group Co.Ltd(002568) )
Japanese market: high market concentration, mainly non ready to drink channels. 1) From the development experience of pre mixed liquor in Japan, the rapid expansion of pre mixed liquor market in the late 1990s is related to the tax reform of beer market. After 2006, Japan entered the “fourth consumption era”, and the advantage of pre mixed liquor in cost performance has been enlarged again, becoming the new favorite of the younger generation’s choice of liquor; 2) From the perspective of the competition pattern of pre blending in Japan, at present, the industry presents a competition pattern of “one super and two strong”, with CR3 of 75%, the market share of Suntory, the leader of the industry, reaching 38% in 2020, and the three leaders of pre blending track are beer leaders. The pattern is stable. 3) From the perspective of the development of leading liquor enterprises, Suntory’s ability to overtake at corners is mainly due to the accurate control of the four major trends of the industry and the systematic layout of the four characteristics of “her consumption, house consumption, new consumption and health” of Japan’s pre blending market.
Chinese market: it is still in its infancy, and the market ceiling is high. 1) From the development experience of the industry, China’s pre blending industry ushered in an explosion in 2015 driven by multiple capital. In 2016, due to problems such as lower than expected terminal dynamic sales and serious product homogenization, most capital withdrew and the industry entered a period of in-depth adjustment. Driven by Shanghai Bairun Investment Holding Group Co.Ltd(002568) in 2019, the industry will gradually recover and enter a new development cycle; 2) From the perspective of industry competition, at present, Bairun is unique, with a market share of more than 80%. Start-up small brands are easy to survive, and large and medium-sized brands have almost lost the possibility of shopping with Ruiao. The only variable comes from the transformation of beer leading liquor enterprises, which may reshape the pre blending market together with Bairun in the future; 3) In the light of Japan’s experience, China’s pre blending industry is similar to that of Japan in 2014. The continuous expansion of consumer groups is expected to accelerate the expansion of the industry in the next 2-3 years. If China’s per capita consumption of pre blending wine reaches 3% (0.38l) of Japan’s per capita consumption in 2020 in the next five years, the total sales volume can reach about 540000 tons (accounting for more than 1% of beer sales). If the ton price remains unchanged, the sales volume is expected to reach more than 11 billion.
History of the company: accumulation and development, pre blending as the leading business. The company was founded in 1997 and started the pre blending business in 2003. Rio basically covered the national market in 2008 and was successfully listed on the Shenzhen Stock Exchange in 2011. During the period of deep adjustment of the industry from 2015 to 2017, Bairun became an industry oligarch by actively promoting channel reform, cracking down on Shanzhai brands and share repurchase. From the performance of the company in the past difficult period, it can be seen that Shanghai Bairun Investment Holding Group Co.Ltd(002568) itself has tenacious characteristics and the company’s firm determination to make efforts to pre mix wine.
Products and brands have a first mover advantage, and channel reform is accelerating. 1) In terms of products, according to the changes of consumers’ habits, the company’s main products have gone through three iterations, which is in line with the transformation of “feminization” and “health” in the industry. The large single products have changed from the original classic series with high sweetness to the slightly drunk series designed for women, and launched two major single products, strong and refreshing, focusing on the characteristics of “0 sugar, 0 fat and bubble water”, which has a first mover advantage over competitive products; 2) In terms of brand value, Ruiao ranks first in the industry with more than 10 billion yuan. In terms of brand playing method, it mainly focuses on naming in the early stage. At present, it focuses on cross-border and IP building to attract the attention of young groups; 3) From the perspective of channels, non ready to drink channels, under the condition of ensuring the basic market in East China, gradually make continuous efforts to core markets such as West China and promote the process of nationalization; In the ready to drink channel, cooperate with chain brands to provide customized services, and continuously improve the company’s revenue ceiling by shaping emerging scenes.
Profit forecast and investment suggestion: first coverage and “buy” rating. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 780 / 9.8 / 1.2 billion, a year-on-year increase of + 17% / 27% / 22%, corresponding to EPS of RMB 1.0 / 1.3 / 1.6. The current share price corresponds to 30x / 23x / 19x PE from 2022 to 2024.
Risk tip: the pace of economic recovery needs to be observed, the epidemic situation is repeated, and the competition in the pre blending market is intensified
