Incident Overview
The company achieved revenue of 3.59 billion yuan in 24Q1, +1.7% year-on-year, achieved net profit of 100 million yuan, +58.9% year-on-year, and realized net profit without deduction of 100 million yuan, or +81.7% year-on-year.
Analytical judgment:
The high revenue base increased slightly year-on-year, and the sales revenue growth rate was relatively good
On the revenue side, due to the company's rapid sales growth rate in 23Q1 (23Q1 revenue +13.74% YoY) and a high base, the company's 24Q1 apparent growth rate was slightly lower, but it continued its positive growth trend. From a cash flow perspective, the company achieved sales revenue of 4.30 billion yuan in 24Q1, +7.3% year-on-year, and the growth rate exceeded that of the revenue side. Based on the contract debt balance analysis, the company's 24Q1 contract debt balance was 1,474 billion yuan, +6.5% year-on-year. We believe that the company's subsequent performance increase is still guaranteed, and it is expected to be released with the arrival of the peak beer consumption season.
Increased profit margins, release of reform dividends
On the cost side, the company's 24Q1 gross margin was 37.2%, +0.4pct year-on-year, and remained stable. On the cost side, the company's 24Q1 sales/management/R&D/finance expense ratios were 11.93%/11.76%/1.9%/-0.95%, respectively, -0.56/-0.21/-0.07/+0.23pct, respectively. The effectiveness of the company's reforms has been shown. The sales/management expense ratio has declined markedly, driving the overall cost rate level down to 24.64%, -0.61 pct year on year. In addition, the corporate income tax rate and minority shareholders' share of equity have all declined, to 21.41%/20.75%, respectively, compared to -7.30/ -7.46pct, respectively. We believe this reflects the positive trend of weak subsidiaries reducing losses. On the profit side, the company's 24Q1 net profit margin/net profit margin after deducting non-return to mother was 2.86%/2.86%, respectively, +1.03/+1.26pct, respectively, with a significant increase in profit efficiency.
Focus on peak season sales, and expect a high increase in full-year results
Judging from the annual operating pace of beer companies, the peak sales season is usually Q2/Q3, and the reporting period usually accounts for 60-70% of the annual revenue in the two quarters, so sales in the next two quarters are critical to the company's annual performance. We are still optimistic that the company's annual performance will increase. The main reason is 1) the company's core single product, U8, still has potential sales volume of +36% compared to last year, and is expected to maintain a high growth rate this year; 2) the company's reporting side still has a large margin of performance, and sales revenue is guaranteed during the peak season; 3) the company's reform dividends will continue to be realized, and it is expected that events such as the Olympics and European Cup, which resonate with the peak season for beer consumption, will stimulate beer sales.
Investment advice
Referring to the company's latest financial data, and taking into account the high base of 23Q1 and the low revenue share and performance margin in Q1, we maintain the 24-26 revenue forecast of 151.63/160.12/16.729 billion yuan, and maintain the 24-26 EPS forecast of 0.31/0.40/0.47 yuan, corresponding to the closing price of 9.77 yuan/share on April 26, PE was 31/25/21 times, respectively, maintaining the “gain” rating.
Risk warning
The high-end process fell short of expectations, the reform process fell short of expectations, and industry competition intensified. Furthermore, in October 2020, Zhao Xiaodong, the former chairman and general manager of the company, was investigated and placed in litigation by relevant departments; in February 2024, the company and sole director Liu Jingwei and director Xu Yuexiang received a warning letter from the Beijing Securities Regulatory Bureau, which hereby alerted to the risks.