Introduction to this report:
The profit flexibility brought about by the company's reforms continues to be prominent. There is still significant room for performance improvement due to structural upgrades and potential cost reduction, and the acceleration of the peak season is worth looking forward to.
Key points of investment:
Investment advice: Maintain an “Overweight” rating. Maintain the 2024-26 EPS forecast of 0.33, 0.43, and 0.53 yuan, and maintain the target price of 12.3 yuan.
Revenue fell slightly short of expectations and slightly exceeded expectations after deducting non-profit. The 24Q1 company achieved revenue of 3,587 billion yuan, +1.72% year over year, net profit to mother of 103 million yuan, +58.90% year over year, net profit without deduction of 103 million yuan, and +81.72% year over year. The apparent revenue was slightly lower than market expectations, but the performance of advance payments and cash flow was good. Revenue plus the month-on-month increase in contract liabilities was +4.1%, and sales revenue was +7.3% year-on-year; profit elasticity continued to materialize, and the non-profit margin slightly exceeded expectations.
Structural upgrades continue, and rates are showing a trend of optimization. Considering that the company's beer sales base was high during the same period in '23, the “steady growth of the company's indicators during the reporting period” revealed in the company's quarterly report of '24 is not easy. We expect U8 sales to continue to grow rapidly and the product structure to continue to improve.
24Q1 gross margin was +0.4 pct to 37.2% year over year, and is expected to show an upward trend under structural upgrades and cost optimization. The overall cost side showed optimization and reform to improve cost efficiency. The 24Q1 sales/management/R&D/finance expense ratio was -0.6/-0.2/-0.1/+0.2pct year on year, the net interest rate to mother was +1.0pct to 2.9% year on year, and after deducting non-net interest rate +1.3 pct to 2.9% year on year. We believe that the company's net interest rate still has a lot of room to improve under the efficiency of the reform.
After getting past the high base, it is worth looking forward to the acceleration of the peak season. Under the company's all-round transformation, we expect each subsidiary to gradually achieve more balanced and comprehensive improvements. With the strengthening of headquarters functions, continuous improvements in human efficiency and supply chain efficiency have brought about cost reduction and flexibility. After steadily passing through the high base period, the company's volume and price growth can be expected to accelerate month-on-month as the peak beer season gradually approaches, compounding changes and exploration.
Risk warning: increased market competition, fluctuating raw material costs, weather factors, etc.