Event: Budweiser Brewing Company APAC Limited released the 2022 semi-annual performance report, 22H1 achieved operating income of US $3.45 billion, endogenous growth of 2.7% X EBITDA of US $1.139 billion, endogenous growth of 0.4%. Of this total, 22Q2 achieved operating income of US $1.821 billion, with an endogenous growth of 3.7%. Ten EBITDA was US $569 million, with an endogenous decline of 5.6%.
Restorative growth has been achieved in the eastern region, while sales in the western region are still a drag.
In terms of weight price, 1) volume: the company's sales volume of 4.52.26 million tons of Q2 in the first half of 2022, compared with the same period last year,-1.4% Universe 0.4%, 2) Price: the price of wine in the first half of 2022 / Q2 tons compared with the same period last year + 4.2% and 4.1%. The company continues to promote the high-end development strategy, and the price of per ton of wine has increased in all major markets, with a gross profit margin of 50.7% and 50.5% in the first half of 2022 / Q2 gross profit margin of 50.7% and 50.5% in Q2, compared with the same period last year.
From a regional point of view, 1) Western Asia: 22Q2 revenue and EBITDA year-on-year + 0.8% Maxim 12.1%, sales-1.4%, ton wine price + 2.2%. Among them, India's 22H1 industry sales have returned to above the pre-epidemic level, due to a low base in the same period last year, the company's total sales of high-end and ultra-high-end products doubled in the first half of this year. 2) Eastern Asia: 22Q2 revenue and EBITDA year-on-year + 16.8% Universe 34.9%, sales + 7.4%, ton wine price + 8.7%. Among them, South Korea 22Q2 achieved high single-digit growth in sales, high single-digit increase in ton wine prices, and core brands such as Kay Lion and HANMAC increased by 7.7%. Taken together, the income increased by double digits.
The repeated epidemic situation has greatly affected the Chinese region.
In 2022, the company was repeatedly affected by the epidemic in China, night shows and catering channels were adjusted, and beer industry sales declined in the single digits from mid-March to May. With the gradual improvement of the epidemic situation, the company's sales in China achieved high-digit growth in June, including double-digit growth in the sales of high-end and ultra-high-end products.
The income of 22H1's high-end and ultra-high-end product portfolio is higher than that of 19H1 (before the epidemic). In 2022, the company plans to increase the number of cities for high-end brand expansion to more than 70. Although some areas were affected by the epidemic in the first half of the year, the company made progress in expanding in China, with sales of 22H1 Budweiser and ultra-high-end products growing by double digits in expansion areas that were not affected by the epidemic. Overall, 22H1 China achieved revenue and EBITDA compared with the same period last year-3.2% Mather 7.3%; sales-5.5%, and the price of tons of wine + 2.4% year-on-year.
Earnings forecast, valuation and rating: the company has a leading position in the Asia-Pacific market and relies on the mature strategic system and rich product reserves of the parent company Budweiser Group. It maintains a home net profit forecast of US $11.56 pound for 2022-2024, equivalent to RMB 0.59 for 2022-2024 and RMB 0.67 for PE for 2022-2024. The current stock price corresponds to 35x/30x/27x for 22-24. We continue to value the company's competitive advantage in high-end and ultra-high-end areas and maintain its "overweight" rating.
Risk tips: the channel control is weakened; the market competition is intensified; the rise of raw materials is higher than expected.