Overview of events
The company released its quarterly report for the third quarter of 2020 on October 19th. The company achieved revenue of 558 million yuan in the first three quarters, + 11.79% year-on-year, and net profit of 37.9 million yuan, + 37.24%, and deducted non-net profit of 34.53 million yuan, + 73.40% over the same period last year.
20Q3 achieved 238 million yuan in revenue in a single quarter, + 17.46% year-on-year, and 28.97 million yuan in net profit, + 34.11% in the same period last year.
II. Analysis and judgment
The company's Q3 beer business continued its high demeanor and actively realized a virtuous circle after the epidemic. In terms of sales volume, the company achieved 2055 million liters of beer in the first three quarters, + 11.56% year-on-year, of which 20Q3 achieved 887 million liters of beer in a single quarter, a year-on-year + 18.06%, continuing the strong performance of 20H1. The effect of the company's positive actions in marketing and blank market after the epidemic continues to be realized. From the perspective of tonnage price, the company's sales tonnage in the first three quarters was 2682 yuan per thousand liters, which was basically the same as that in the same period last year, mainly because the company implemented a more active marketing strategy with Yanjing parent company after the second quarter, promoting sales significantly better than the industry average. While the tonnage price is basically the same as the same period last year, the company's profit level has improved significantly, which once again proves that the reform measures such as cost reduction and efficiency measures of various companies in the Yanjing system have been significantly effective. From the point of view of the sales region, the revenue of 20Q3 in Fujian Province / outside Fujian Province reached 1790.56 million yuan respectively, which was 9.56% higher than that of the same period last year, and the market in the province led the growth. In terms of the number of dealers, the net growth of 20Q3 provincial / non-provincial dealers in the single quarter was 14x6 respectively. After cleaning up the inefficient dealers in the first half of the year, the market expansion led to the addition of new dealers. At the end of the period, the number of provincial / non-provincial dealers was 439x200 respectively.
The operating efficiency has been significantly improved, and the profit side has a bright performance.
From the perspective of gross profit margin, the company's sales margin in the first three quarters was 29.59%, year-on-year-0.27ppt, mainly related to the company's active sales policy and strengthening purchases and gifts since the beginning of this year. From the perspective of the period expense rate, the expense rate in the first three quarters was 11.27%, compared with the same period last year-2.38ppt, and the sales / management / R & D / financial expense rate was respectively year-on-year-0.91ppt/-0.73ppt/+0.04ppt/-0.77ppt. The overall decline in the three fees was mainly due to Yanjing parent company strengthening the profitability assessment of its subsidiaries and improving the company's operating efficiency in an all-round way. In terms of net interest rate, the net interest rate of the company in the first three quarters was 6.79%, which was + 1.26ppt compared with the same period last year, and the net profit was + 37.24% compared with the same period last year. 20H1 non-profit and loss decreased significantly compared with the same period last year, deducting non-net profit of 34.53 million yuan, + 73.4% year-on-year, deducting non-net interest rate of 6.18%, year-on-year + 2.20ppt, the company's real profitability has been fundamentally repaired.
The company's business improvement has been continuously verified, and the bright performance of the company's three quarterly reports looking forward to the company's future changes has verified our previous research and judgment in the comments of the China News: after Mr. Liu Xiangyu went from Yanjing headquarters to Huiquan as chairman, strengthening the internal team construction of Huiquan Beer has significantly enhanced Huiquan's internal cohesion and external market competitiveness. 20Q1 Huiquan Beer has the smallest decline in revenue among listed beer companies, 20Q2 revenue growth ranks second among listed companies, while 20Q3 continues the trend of high income and profit growth. The company's business improvement has been continuously verified, and we look forward to the new changes of Huiquan Beer in the future.
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, 0.40 million, 12.6%, 12.6%, respectively, and the EPS is 0.12, 0.14, 0.16, and the PE is 60X/50X/44X. The company's valuation is 63 times lower than that of the beer sector in 2020 (wind consensus expectation, arithmetic average method). Based on the fact that we are optimistic that the company's business conditions will continue to improve in the future, we will maintain the "recommended" rating.
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.