Jingu Finance News | Guosheng Securities issued a research report stating that China Res Beer (00291), in terms of brand, in 2020, officially partnered with Heineken to create a "Chinese + International Brand" "4+4" high-end brand matrix, accurately targeting different consumer groups. In 2023, officially entered the baijiu industry, baijiu and beer mutually empowering, brand strength expected to further enhance. In terms of products, covering all price ranges, with four major international brands supporting four major local brands, committed to high-end refinement. Under the strategy of focusing on flagship products, classic flagship product Snow Beer paired with youthful flagship product Heineken, and adventurous superX continually exerting efforts. In terms of channels, under the aggressive high-end development model, building a major customer platform to seize high-end channel resources; continuous cost reduction and efficiency improvement, continuous nationwide deep cultivation.

The bank stated that the beer industry has stable sales and price increases, entering the second half of high-end development. In terms of sales volume, beer production peaked in 2013, stabilized after 2018, and is expected to stabilize in the future under the aging trend. In terms of pricing, the high-end process is over half completed, with still broad room for upgrading. The bank believes that the price range of 6-10 yuan may have the largest expansion space in recent years. Regarding channels, beer channels are diverse and endpoints are scattered, with strong control by enterprise endpoints. The future recovery of on-premise consumption will boost high-end performance. In terms of competition, the bank estimated that the industry CR5 will reach 92% in 2023. Most provinces show an oligopoly pattern, with future efforts on high-end new products and refined channels being the breakthrough.

The bank believes that leading companies will benefit first from the recovery under policy stimuli, continued focus on high-end development. During the off-season for beer, the overall base is low, under policy stimuli, cyclical sectors such as the dining supply chain will be the first to benefit. As an industry leader, the company's "3+3+3" strategy will enter the final battle of the last three years next year. The morale of the whole company is high, with overall demand expected to boost; full-year barley costs significantly declined, with the anticipation of margin improvement. Continuous cost reduction and efficiency improvements are expected to release profit elasticity. The bank expects the company to achieve net income attributable to the parent from 2024 to 2026 of 5.28/5.87/6.38 billion yuan, with a year-on-year increase of +2.4%/11.4%/8.5%, and EPS of 1.63/1.81/1.96 yuan/share, as an industry leader, the company will be the first to benefit from the sector recovery, and a "buy" rating is given for the first time.