I. Overview of events
When the company released its semi-annual report on August 25, 20H1 achieved operating income of 320 million yuan, + 7.93% year-on-year; net profit of 8.92 million yuan, + 48.5% year-on-year; and basic EPS of 0.036 yuan. 20Q2 realized operating income of 211 million yuan, + 22.73% compared with the same period last year, and net profit of 16.0016 million yuan, + 37.19% over the same period last year.
II. Analysis and judgment
The company's Q2 performance is eye-catching and achieves high growth in many aspects.
20H1 achieved beer sales of 11.68 million kiloliters, + 7.08 percent year-on-year, and beer revenue of 3.162 billion yuan, and the sales tonnage price of 20H1 beer was 2707 yuan per kilolitre, slightly higher than 19H1's 2692.03 yuan per thousand liters. 20Q2 achieved beer sales of 768 million liters in a single quarter, + 21.82% year-on-year, beer revenue of 208 million yuan, + 22.44% dagger 20Q2 single-quarter cash received by the company was 237 million yuan, + 37.44% year-on-year, net cash flow of business activities was 98.96 million yuan, + 126.56%. The company's 20Q2 has actively followed up the market demand and optimized the channel structure, made breakthroughs in the blank market, community terminal network construction and catering special marketing programs, and achieved sound development in the catering channels and key markets.
From the point of view of the sales channel, the wholesale agent / direct sales of 20Q2 Company achieved income of 203 million yuan / 4.94 million yuan respectively, which was + 21.99% and 36.26% respectively compared with the same period last year. The direct sales channel benefited from the active development of e-commerce channels during the epidemic. From the point of view of the sales region, the proportion of 20Q2's non-provincial income has further increased to 27.33%, and the growth rate of intra-provincial / non-provincial sales revenue is + 19.42% / 30.65% respectively compared with the same period of last year. The market outside the province has expanded well. From the point of view of dealers, 20H1 has a net reduction of 21 dealers (a total of 61), and the team has become more streamlined and efficient.
Operating efficiency has been significantly improved and profitability has been significantly improved.
From the point of view of gross profit margin, 20H1 sales gross profit margin of 28.02%, year-on-year-0.41ppt, basically remained stable, the positive effect of a small increase in tonnage price has not yet been clearly reflected. From the point of view of the period expense rate, the period expense rate of 20H1 company is 14.82%, compared with the same period last year-2.03ppt, and the sales / management / R & D / financial expense rate is 5.41% 2.03ppt, respectively. The sales / management / R & D / financial expense rate is 5.41%, 7.66%, 2.51%, 0.76%, respectively, compared with the same period last year. The overall operating efficiency has improved significantly. The advertising fee of 20H1 company is 749100 yuan, which is + 193.32% compared with the same period last year, which shows that the company intends to strengthen its brand promotion. The use of the overall cost of the company is clear, primary and secondary, and the reduction of expense rate during the period mainly comes from the improvement of management level. From the perspective of net interest rate, the net interest rate of 20H1 company is 2.79%, compared with the same period of last year + 0.76pptMagne20Q2 company 7.59pct, year-on-year + 0.8ppt. As 20H1's non-profit and loss income decreased significantly compared with the same period last year, the deduction of non-net profit actually attributed to listed companies increased by 509.16% compared with the same period last year, achieving great-leap-forward growth, and the company's profitability was fundamentally repaired.
Be optimistic about the marginal improvement trend of the company's management, and look forward to more new changes after Mr. Liu takes ownership. Huiquan Beer, as the only beer listed enterprise in Fujian Province, enjoys a high reputation locally. In the past, the decline in operation was mainly due to the impact of imported beer in Fujian and the intensification of market competition. In November 2019, Mr. Liu Xiangyu went from Yanjing headquarters to Huiquan as chairman. We think that the appointment of Mr. Liu sent two positive signals: 1) the management team of the company is getting younger. After the 48-year-old Zhao served as chairman of Yanjing Beer, the upright 49-year-old Liu took over Huiquan Beer, looking forward to the new changes brought about by the company's younger age in the future. 2) the operation of Huiquan Beer will continue to improve. Boss Liu has served as Yanjing Deputy General Manager and Dong Secret, who is well versed in the company's business, and is in charge of personnel work after 2017 with rich management experience. Boss Liu is expected to continue to strengthen team building in Huiquan in the future. Huiquan cohesion and market competitiveness are expected to be further improved. From the perspective of actual business performance, Huiquan is the company with the smallest decline in 20Q1 single-quarter income among A-share beer listed companies, and it is also the fastest-growing 20Q2 one-quarter income among the beer enterprises reported so far, which has shown a significant improvement trend.
III. Investment suggestions
It is estimated that the income for 20-22 will be RMB 627,707, RMB 768 million, compared with the same period last year, which is + 11.3%, 12.8%, 8.6%, and the net profit is 0.29, 0.36, and 0.36 million, respectively. The year-on-year net profit is + 48.8%, 21.5%, 12.6%, and EPS is 0.12, 0.14,0.16, and the corresponding PE is 62X/51X/45X. The valuation level of the company is lower than 70 times PE of the beer sector in 2020 (wind consensus expectation, arithmetic average method). Based on the fact that we are optimistic that the company's future operating conditions will continue to improve, we will give it a "recommended" rating for the first time.
Fourth, risk tips:
The impact of the epidemic exceeded expectations, the competition in the beer market in the province intensified, the promotion of middle and high-end products was blocked, food safety problems and so on.