Chongqing Beer (600132): Southwest beer leader Carlsberg empowers to continue to benefit from high-end in the future

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Chongqing Beer (600132): Southwest beer leader Carlsberg empowers to continue to benefit from high-end in the future
Carlsberg empowers, “local strong brand + international high-end brand” deeply cultivates the southwest market. Carlsberg holds 60% of the shares. The company currently has 14 beer factories with an annual production capacity of more than 100 tons (accounting for about 45% of the Group’s China production capacity), which is called “Chongqing””Shancheng” two local strong brands, “Carlsberg”, “Le Fort”, “Triumph 1664” and “Yilexiandi” and other international high-end brand use rights and net red Wusu beer.The company’s strategically important big cities are deeply cultivated in Chongqing, Sichuan and Hunan. In 2018, beer sales were 940 thousand liters; of which, Chongqing sales were about 710,000 liters, with a market share of more than 80%. The oligopoly competition will gradually shift from large-scale to expanded competition. High-end products are the main trend. The oligopoly competition pattern of the beer industry is based on regional divisions. The CR5 is about 85%. The pursuit of a single scale advantage can no longer guarantee the long-term stable development of the company.The consumption scenario of high-end beer is already highly extensible, which is essentially a need for consumer demand-side reforms. The industry will usher in structural opportunities. The improvement of the product structure in the future will be the core element that drives revenue and rapid growth of profits. Production capacity has been reduced, factory closures have improved efficiency, and the product structure has continued to be optimized. The tonnage price has led to a breakthrough of 3,700 yuan. Since 2013, inefficient production capacity has been phased out. Bottle size has been reduced and advanced management experience has been introduced. The company has focused on high-end products and improved business performance.Revenue of the company’s beer business in 201834.6.7 billion / + 9%, 94 sales.430,000 kiloliters / + 6%, of which “Chongqing” beer sales volume is 550,000 kiloliters, an increase of 444% compared to 2014, and a compound growth of 53% from 2014 to 2018; international brand sales of about 260,000 kiloliters, an increase of 56 compared to 2014%, Compound growth of 27%.”Chongqing” and “Shancheng” local brands accounted for about 73% of sales, and the proportion of high-end products increased steadily.The ton price of 2019Q1-Q3 beer is 3718 yuan, which is the first to exceed 3700 yuan. Behind the high ROE is the improvement of the company’s asset management capabilities. In the mid-term focus on the asset injection window, the company’s product structure continued to be optimized, and the reduction of fixed factory cost sharing was reduced. The company’s gross profit margin in Q1 to Q3 of 2019 was 41.8%, an increase of 4 from 2015.9 points.At present, the impairment of assets brought about by the closure of factories tends to zero, the company’s reasonable layout of production 四川耍耍网 and consumption tax burden continues to decline, the first quarter to the third quarter of 2019 net interest rate.8%, ROE is about 48%, ranking first in the industry.Initial attention was paid to the expectations of asset injection. In 2013, Carlsberg unveiled the tender offer and promised to completely and thoroughly resolve potential competition issues within the next 4-7 years (up to 2020) after the tender offer was completed. Currently, there are more window periods. The compounded net profit of mothers from 2019-2021 will increase by 21.8%. For the first time, we give a “strong recommendation” rating. With the Carlsberg empowerment, the company’s “local strong brand + national high-end brand” grasps the future high-end trend of the industry. In addition, during the window of the merger asset injection window, we expect the company to invest inRealize net profit attributable to mothers in 2021.40/6.38/7.30 ppm, an increase of 58 in ten years.4 / -0.4/14.5%, the corresponding EPS is 1.32/1.32/1.51 yuan.Currently sustainable corresponding to 2019?The PE in 2021 is 36.6/36.7/32.1 times.”Highly Recommended” rating for the first time. Risk reminder: The price of raw materials continues to rise, the “New Crown” epidemic front has dragged down the catering industry, leading to increased sales of high-end beer, low temperatures and rain in summer, and increased competition in Sichuan and Hunan markets.