\u3000\u3000 Eastroc Beverage (Group) Co.Ltd(605499) (605499)
Event: Eastroc Beverage (Group) Co.Ltd(605499) released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will be RMB 1.15-1.25 billion in 2021, with a year-on-year increase of 41.61-53.93%; Net profit deducted from non parent company was RMB 1.05-1.15 billion, with a year-on-year increase of 30.45-42.87%. Among them, Q4 is expected to realize a net profit attributable to the parent company of 154-254 million yuan, with a year-on-year increase of 42.54-135.11%; The net profit excluding non parent company was 84-184 million yuan, with a year-on-year change of - 19.58% to + 75.71%, and the performance was in line with market expectations.
The movable sales are in good condition and the cost is relatively controllable. On the revenue side, the company's operating year is from December of the current year to November of the next year, which is slightly different from the accounting year. Therefore, delivery is controlled in the middle and late November. On the whole, the delivery rhythm of Q4 shipping end is flat, but the terminal dynamic sales are good. On the cost side, the company has locked the price of PET materials in 2021, so the cost of Q4 is relatively controllable. In addition, the company subscribed Zhaoying langyao growth phase II equity investment fund at the end of July. The investment income of private equity fund and other income such as government subsidies also contributed to Q4 performance.
"Dongpeng special drink" has developed steadily and actively built a "energy +" product line. 500ml gold bottle is a large single product of the company. At present, the product still has strong potential energy and is expected to drive the continuous growth of the company's revenue. The company is also actively building a "energy +" product line: 1) Dongpeng Jiayi has been sold in Zhejiang since October 2021, focusing on reaching young consumer groups; 2) In April, it launched the medium and high-end product 0 sugar special drink, which has been promoted in Guangdong, Guangxi and e-commerce channels since June; 3) In September, Dongpeng's "big coffee" shake latte was launched to lay out the ready to drink coffee track. At present, the product has been on trial sale in Guangdong and e-commerce channels; 4) In December, "Daneng" energy drink was launched without sucrose. The juice content reached 30%, and fish collagen peptide was added to meet the needs of female consumer groups.
Intensive cultivation of the Guangdong market is still on the way to nationalization. Guangdong is the company's base market. In the first three quarters of 2021, the revenue of Guangdong province accounted for more than 40%, but the market development in Guangdong Province is still uneven. The revenue contribution of Western and northern Guangdong is less than that of the Pearl River Delta. In the future, the company will continue to improve the market channel coverage of its base. In addition, in 2022, the company plans to set up a large catering area in Guangdong, cooperate with chain catering stores, increase the penetration of Dongpeng special drink in catering channels, and actively promote non energy drinks such as orange lemon tea, Chenpi special drink and Dongpeng natural water. In 2021, one production line of H1 Chongqing base was put into operation. It is expected that multiple production lines will be added in 2022, helping the rapid growth of sales in Southwest China. Meanwhile, the company plans to establish a production base in Changsha, Hunan, covering Jiangxi, Hunan, Hubei and other regions, which will provide support for the large-scale production of products in Central China. At present, there is still a large space to be developed in North China. The company has adjusted the personnel organization structure of North China business division and looks forward to rapid development in North China.
Profit forecast, valuation and rating: considering the contribution of private fund investment income to the performance in 2021, combined with the company's channel expansion, new product promotion planning and the pace of expansion outside the province from 2022 to 2023, we raised Eastroc Beverage (Group) Co.Ltd(605499) the net profit from 2021 to 2023 to RMB 1.189/1.508/1.912 billion respectively (13% / 11% / 12% higher than the previous time), equivalent to EPS of RMB 2.97/3.77/4.78 from 2021 to 2023, The current share price corresponds to 58 / 46 / 36 times of PE from 2021 to 2023, maintaining the "overweight" rating.
Risk warning: the risk that the nationalization process is not as expected; Risks of intensified industry competition
