Incident Overview

The company achieved revenue of 28.959 billion yuan in 24Q1-Q3, -6.52% year-on-year, net profit of 4.99 billion yuan, +1.67% year-on-year, after deducting non-attributable net profit of 4.686 billion yuan, or +1.96% year-on-year. According to this estimate, the company achieved revenue of 8.891 billion yuan in 24Q3, -5.28% year-on-year, net profit to mother of 1.348 billion yuan, or -9.03% year-on-year, after deducting non-return net profit of 1.26 billion yuan, or -7.94% year-on-year.

Analytical judgment:

The sales side is under pressure, and the product structure is still resilient

In terms of volume and price breakdown, the company achieved sales volume of 6.785/2.155 million tons in 24Q1-Q3/24Q3, respectively, -7.0%/-5.1%, respectively. The corresponding tonnage price was 4268/4125 yuan, respectively, +0.5%/-0.2% year-on-year, respectively. There is some pressure on the sales side, and the tonnage side remains stable. By product grade, the company's high-end products, 24Q1-Q3/24Q3, achieved sales of 2.779/0.883 million tons, respectively, -4.2%/-4.8% year-on-year, respectively, and the decline was lower than the company average. By brand, the company's main brand products, 24Q1-Q3/24Q3, achieved sales of 3.835/1.225 million tons respectively, or -6.2%/-4.2% year-on-year, respectively. Looking at the company's tonnage price and high-end product performance, we believe that although the company is under pressure on the sales side, the product structure is still resilient.

The gross margin has increased, and the sales side has increased its investment

On the cost side, the company's gross margins for 24Q1-Q3/24Q3 were 41.8%/42.1%, respectively, +2.0/+1.2pct year-on-year, respectively. We believe that the year-on-year increase in gross margin was mainly due to the release of cost-side dividends. On the cost side, the company's 24Q1-Q3 sales/management/R&D/finance expense ratios were 11.8%/3.2%/-1.5%, respectively, +0.6/-0.1/-0.4pct; of these, 24Q3 company's sales/management/ R&D/finance expenses rates were 14.1%/3.1%/0.3%/-1.6%, respectively, +2.4/-0.9/+0.2/-0.4pct, respectively. The company significantly increased its investment in 24Q3, which we believe is mainly due to coping with market competition in an overall weak environment. On the profit side, the company's 24Q1-Q3/24Q3 net profit margins were 17.2%/15.2%, respectively, +1.4/-0.6pct year-on-year; the company's 24Q1-Q3/24Q3 net profit margins were 16.2%/14.2%, respectively, +1.4/-0.4 pct year-on-year, respectively. In the context of increased investment, the Q3 profit level remained stable year over year.

Look forward to a recovery in consumption and focus on structural growth

Affected by factors such as a weak macro consumption environment, the beer industry's overall sales side was under pressure this year. According to data disclosed by the National Bureau of Statistics, China's beer industry achieved an output of 29.3 million tons in 24Q1-Q3, or -2.1% year-on-year, of which 24Q3 achieved an output of 10.21 million tons, or -4.1% year-on-year. Referring to the operating pace of the beer industry, Q4 has entered a low sales season. We expect companies to focus on adjustments in the short term. With the introduction of various economic and consumer stimulus policies, we believe it is necessary to continue to pay attention to the pace of consumption recovery, and the beer industry is expected to improve in the future. From the perspective of the beer industry, we believe that the price band above 10 yuan has initially shown a squeezing growth trend, and the structural increase provided by the 8-10 yuan middle and high-end price band is worth paying attention to.

Investment advice

Referring to the company's latest financial data, we lowered our 24-26 revenue forecast of 32.585/33.532/34.645 billion yuan to 31.944/32.882/33.986 billion yuan, and lowered the company's 24-26 EPS forecast of 3.34/3.60/3.94 yuan to 3.21/3.43/3.76 yuan, corresponding to the closing price of 67 yuan on November 1. PE was 21/20/18 times, respectively, maintaining the “buy” rating.

Risk warning

Consumption recovery fell short of expectations, risk of fluctuating raw material costs, and increased market competition