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华润啤酒(00291.HK):升级趋势延续 啤白双向赋能

China Resources Beer (00291.HK): Upgrading Trends Continue Bidirectional Empowerment

國聯證券 ·  Mar 20

Incidents:

The company released its 2023 annual report. In 2023, the company achieved turnover of 38.932 billion yuan, an increase of 10.40%; realized net profit to mother of 5.153 billion yuan, an increase of 18.62% over the previous year.

The upgrade trend continues, and Heineken is growing at a high rate throughout the year

Benefiting from the restoration of the ready-to-drink scene, the beer business achieved sales volume of 11.151 million kiloliters in 2023, an increase of 0.5% over the same period. With the upgrading of the product structure and the release of high-end products, the tonnage price of beer also increased by 4.03% to 3305.98 yuan. Among them, second-grade products and above achieved sales volume of 2.5 million kiloliters, an increase of 18.93%. The share increased to 22.42%, or 3.48 pcts. Heineken, Xuehua Chunsheng, Lao Xue, and Red Jue all recorded double-digit year-on-year growth. Heineken's sales also increased by nearly 60%, reaching the sales target of 600,000 kiloliters. In 2023, East/Central/Southern Districts achieved turnover of 18.528/98.58/ 99.30 billion yuan respectively, with a year-on-year increase of 3.17%/3.78%/4.58%, with Southern District leading the growth rate.

Cost reduction and efficiency are ongoing, and profit levels are expected to increase

In 2023, the company's overall operating cost was 22.829 billion yuan, an increase of 5.19%. Among them, the operating cost of the beer business was 22.061 billion yuan, an increase of 1.66%, and the cost per ton of beer was 1978.41 yuan, an increase of 1.15%.

With the upgrading of the category structure and the reduction in the cost of some packaging materials, the gross margin of the beer business reached 40.16% in 2023, an increase of 1.7 pct. In 2023, the company's overall sales and distribution expenses rate reached 20.72%, an increase of 1.57 pct, or was affected by the resumption of terminal sales activities; however, at the same time, the company continued to promote a number of cost reduction and efficiency measures, and administrative and other expenses fell to 8.64% in 2023, a year-on-year decrease of 0.78 pct.

Bibai is empowered in both directions, and business collaboration complements each other

The company's liquor business achieved annual turnover of 2,067 billion yuan and an EBIT rate of 6.29%. Excluding the impact of intangible asset amortization due to the acquisition of Guizhou Sands, the EBIT was 797 million yuan, and the EBIT rate was 38.56%. In 2023, the company launched the “Jingping” summary product and the special small light bottle “Jinsha Sauce” to cultivate sauce-flavored flavors for young consumers, which is expected to gradually restore channel confidence.

Profit Forecasts, Valuations, and Ratings

The company's “beer+white” business models complement each other. Heineken's growth rate is impressive, and the liquor business has improved marginally. The company actively increases the dividend rate, demonstrating the importance it attaches to investors. However, in the context of a weak recovery in consumption, the pace or marginal slowdown of high-end upgrading, we expect the company's 2024-2026 revenue to be 419.74/446.79/47.306 billion yuan, respectively, with year-on-year growth rates of 7.81%/6.44%/5.88%, and net profit to mother of 61.28/71.31/7.850 billion yuan, respectively. The year-on-year growth rates are 18.91%/16.37%/10.08%, EPS 1.89/2.20/2.42, respectively In yuan/share, we gave the company 24 times PE in 2024, corresponding to a target price of $45.33, corresponding to HK$49.24 according to the exchange rate of March 18, 2024.

Risk warning: Costs continue to rise, promotion of high-end products falls short of expectations, food safety issues.

The translation is provided by third-party software.


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