\u3000\u3000 Eastroc Beverage (Group) Co.Ltd(605499) (605499)
Event:
Eastroc Beverage (Group) Co.Ltd(605499) : the company issued a performance forecast. It is expected that the net profit attributable to the parent company will be RMB 1.15-1.25 billion in 2021, a year-on-year increase of + 41.61% - 53.93%, and the net profit deducted from non-profit will be RMB 1.05-1.15 billion, a year-on-year increase of + 30.45% - 42.87%.
Key investment points:
The performance exceeded expectations, and the profit still achieved rapid growth under the pressure of raw material cost. The company expects to realize a net profit attributable to the parent company of 150-250 million yuan in 2021q4, a year-on-year increase of + 43% - 135%, exceeding the expectation; Deduct non net profit of RMB 80-180 million, a year-on-year increase of - 20% ~ + 76%, in line with expectations. Q4 is the off-season for energy drinks, but on the one hand, while ensuring the steady growth of the base camp in Guangdong, the company actively develops business outside the province. The sales revenue in East China increased by 72% year-on-year in the first three quarters, and has become the second largest market of the company; On the other hand, expand the "energy +" product line, cover more consumer groups, and superimpose Wuxi Online Offline Communication Information Technology Co.Ltd(300959) multi-channel promotion. It is expected that the Q4 revenue end will still achieve a high growth rate. Last year, the cost of raw materials such as sugar and pet increased significantly. The company hoarded goods and locked prices in advance, which had little impact on its profitability in 2021. If the raw materials and packaging materials remain high in 2022, the cost pressure will become a common problem faced by the soft beverage industry. As a leading enterprise of energy beverage, the company has strong anti risk ability, and can alleviate the cost pressure by optimizing the cost. It is expected that the profit side will be limited.
The competition for Red Bull trademark continued to benefit the local energy beverage brand, and the nationalization process of the company was steadily promoted. Energy drinks are still in the stage of rapid development. Their functionality ensures the re purchase rate of consumption. Red Bull, the industry leader, is still limited. Trademark disputes have stalled, which is good for local enterprises. Dongpeng special drink is the first brand of domestic functional drinks. After listing, its popularity has been further improved. The sales of its headquarters in Guangdong are stable, the weak areas are promoted smoothly, and there is still a large blank market outside the province. The large single product 500ml gold bottle meets the cost performance needs of the target group and continues to be in high volume. Last September, the company launched the coffee beverage Dongpeng "big coffee", and developed taurine vitamin beverage to enrich the "energy +" product matrix of functional beverage. After the Spring Festival, Zero sugar products are expected to be promoted to the whole country, and the aerated series is also expected to launch a variety of flavors, and the contribution income of new products can be further increased. On the channel side, the company vigorously laid Ka and gas station channels. In the first half of 2021, the sales network covered about 1.79 million terminal stores across the country, growing rapidly. Compared with red bull, the company still has broad space and is optimistic about the long-term growth of the company.
The profit forecast and investment rating company is still in the stage of national expansion. Its headquarters, Guangdong, still has steady growth under a high base. After years of hard work, East China and central China began to increase in large quantities. It grew rapidly in the first three quarters and became the second and third largest markets respectively. The company still has potential in the north and North China. With the advantages of high cost performance, convenient carrying, good effect and good taste of the company's large single products, it is expected to take advantage of Red Bull's deep involvement in the trademark dispute to realize rapid growth. We estimate that the company's net profit attributable to the parent company in 2021, 2022 and 2023 will be RMB 1.21/15.0/1.85 billion, a year-on-year increase of + 48% / 24% / 24%, corresponding to eps3.5% 01 / 3.74/4.64 yuan, pe52 / 42 / 34 times, with "buy" rating for the first time.
Risk tips: (1) risks with single product structure and concentrated regional distribution; (2) The growth of energy beverage industry is less than expected; (3) Red Bull brand price reduction risk; (4) The company's core potential and market investment attraction are less than expected; (5) Food safety risks.
