occurrences
On April 24, 2024, Yanjing Brewery announced its results for the first quarter of 2024.
Key points of investment
Revenue remains stable and profits are growing rapidly
The company achieved Q1 revenue of 3.587 billion yuan (+1.72% year over year) and operating profit of 169 million yuan (+34% year over year), of which other revenue reached 122 million yuan (+135.83% year over year), mainly due to the increase in value-added tax input credits during the reporting period. The company's actual income tax rate decreased by 7.3 pcts year on year to 21.41%, net profit attributable to mother reached 103 million yuan (+58.90% year over year), and net profit without deduction to mother was 103 million yuan (+81.72% year over year).
Appropriate rate control, increased profit level
The company achieved a gross margin of 37.18% in Q1 of 2024 (+0.4pct year over year). The company continues to promote nine major changes, including supply chain construction and information technology construction, to coordinate resource allocation, effectively improve management quality and efficiency, and properly control rates. The company's Q1 sales rate in 2024 was reduced by about 0.57 pct to 11.93% year on year, and the management rate was slightly reduced to 11.76% (-0.21pct year on year), driving the company's 2023 net interest rate to 3.61% (+1.06 pcts year over year), and the profit level increased.
Profit forecasting
We are optimistic that the company's high-end products, led by U8, will continue to increase in volume, which will drive the continuous optimization of the company's sales structure; and as the company's nine major changes continue to advance, cost control efficiency improvements and subsidiary loss reduction are expected to jointly boost the company's profitability, and profits are expected to maintain a high growth rate. EPS is expected to be 0.32/0.40/0.48 yuan in 2024-2026, and the current stock price is 30/24/20 times PE, respectively, maintaining a “buy” investment rating.
Risk warning
Downward macroeconomic risks, falling short of expectations in peak season sales, risk of rising raw materials, blocking the high-end process, etc.