occurrences
On April 29, 2024, Chongqing Brewery released its performance report for the first quarter of 2024.
Key points of investment
Appropriate rate control, increased gross margin boosts profit levels
The company's revenue for the first quarter of 2024 was 4.293 billion yuan (up 7.16%), achieving sales of 886,800 thousand kiloliters of beer (up 5.25%); net profit to mother was 452 million yuan (same increase of 16.78%), and net profit after deducting non-return to mother was 446 million yuan (same increase of 16.91%). The company's gross margin for the first quarter of 2024 was 47.90% (+2.74pcts), and the net margin was 20.94% (+1.60pcts). The sales rate for the first quarter of 2024 was 13.13% (same increase of 0.18pct), the management rate was 3.13% (same increase of 0.02pct), and the overall rate was properly controlled.
High-end beer continued to grow rapidly, driving continuous structural upgrading by product. In the first quarter of 2024, the revenue of premium beer (products with a consumer price of 8 yuan and above) was 2,572 billion yuan, up 8.28%; the revenue of mainstream beer (4-8 yuan products) was 1,520 billion yuan, up 3.57%; and the revenue of economical beer (products under 4 yuan) was 86 million yuan, up 12.39%. By region, in the first quarter of 2024, the Southern Region's revenue was 1.299 billion yuan, up 9.32%; the Central Region's revenue was 1,809 billion yuan, up 7.05%; and the Northwest Region's revenue was 1,160 billion yuan, up 3.23%.
Profit forecasting
The Carlsberg Group raised its growth target and entered a new stage of “Fast Sailing” by increasing investment and support for selected growth engines on the basis of the original “Yangfan 27” five-year plan. We expect the company's EPS in 2024-2026 to be 2.98/3.30/3.60 yuan respectively, corresponding to PE 23/21/19 times, respectively. Based on the company's broad space for medium- to long-term development, it will maintain a “buy” investment rating.
Risk warning
Macroeconomic downside risks, cost reductions falling short of expectations, channel expansion and terminal sales falling short of expectations, etc.