On February 7, Chongqing Beer released its 2022 results, KuaiBao.

Main points of investment

Performance is in line with expectations and profits continue to improve

According to KuaiBao's performance, the company's revenue in 2022 was 14.039 billion yuan (up 7%), the net profit returned to its mother was 1.264 billion yuan (up 8.4%), and 1.234 billion yuan was deducted from non-net profit (8%). Among them, we estimate that 2022Q4 revenue is 1.86 billion yuan (same as minus 4%), net profit is 81 million yuan (same as minus 33.6%), non-net profit is 73 million yuan (same as minus 37.3%). We believe that the performance is in line with expectations, with a net interest rate of about 9% in 2022 (same as an increase in 0.3pct), of which the expected net interest rate of 2022Q4 is 4.4% (same as minus 2pct). We believe that the company's performance growth is mainly due to the following reasons: 1) at present, the company continues to promote high-end product management strategy and expand new channels, diversified brand portfolio and effective price increases to help the company's revenue growth. 2) the company continues to promote the organizational structure optimization project, and carries out the operating cost management project to bring cost savings, offset some of the adverse effects of rising commodity prices, and the price increase of superimposed products can effectively improve the return net profit.

The annual price contribution is greater than the volume, and the high-end is expected to speed up the recovery.

According to the performance forecast, we split the weight price relationship: the total sales volume in 2022 is 2.857 million tons (2.4% increase), and the corresponding ton price is 4914.6 yuan / ton (4.5% increase).

Of these, the total sales volume of 2022Q4 is 330000 tons (same as a decrease of 11.5%), and the tonnage price is 5621.9 yuan per ton (an increase of 8.4%). We expect Wusu sales to decline in 2022 compared with the same period last year, and are expected to decline both inside and outside Xinjiang, due to the impact of the epidemic on the northwest at the end of the third quarter. In the whole year, the contribution of price is greater than that of quantity, which is due to the continuous optimization of product structure and the process of high-end, although the impact of the epidemic slows down, but the trend remains unchanged.

Profit forecast

At present, the company steadily promotes the strategy of big cities, and the high-end process of the company is relatively smooth. Wusu has become a large product of nearly one million tons, and others, such as 1664, summer and romance, have potential. In 2023, considering the accelerated recovery of the consumption scene, we are optimistic about the company's performance to speed up the repair. According to the performance of KuaiBao, we slightly adjust the EPS for 2022-2024 to 2.61 PE 3.42max 4.16 yuan (the previous value is 2.71max 3.38max 4.00 yuan), and maintain the "buy" investment rating corresponding to the current stock price, which is respectively multiple of 45-35-29.

Risk hint

Macroeconomic downside risks, peak season sales are lower than expected, price increases are lower than expected, Wusu growth is not as expected, raw materials are rising, and so on.