Tsingtao Brewery (600600): Better than expected, better long-term grasp

Tsingtao Brewery (600600): Better than expected, better long-term grasp
The company’s improvement trend continued in the first quarter, and the short-term prosperity was slightly higher than expected, and sales volume resumed positive growth.From the perspective of the normal development of the industry, the subsequent sales growth rate should not be expected to be too high. The core still needs to look at the high-end to drive the ton price increase to drive growth. It is recommended to arrange the long-term profit improvement logic of the industry, rather than shorten the period performance fluctuations.At the same time, we expect the company to accelerate its reforms and promote breakthroughs.We adjust the EPS forecast for 19-20 to 1.19 and 1.35 yuan, maintain the “prudent recommendation-A” rating. The improvement trend continued, and the short-term prosperity was slightly higher than expected.The company’s 19Q1 single-quarter revenue was 79.5 per cent, an increase of 11 per year.4%, net profit attributable to mother 8.1 trillion US dollars, an annual increase of 21.0%, deducting non-net profit 7.2 ten percent, an annual increase of 26.7%, the improvement trend continues, and the short-term prosperity is slightly higher than expected.The increase in inventories in the working capital account was mainly due to the company’s increase in raw material purchases in response to the increase in costs. Since 18Q4, it has increased significantly. In line with the increase in prepaid accounts, the operating cash flow declined in the first quarter.Up 18.1% to 140.700 million. The sales volume grew faster than expected, and the core still focused on the mid-to-high end to promote the logic of ton price increase.The company’s total sales in the first quarter were 216.60 thousand kiloliters, an increase of 6 in ten years.6%, sales recovery exceeded expectations, but subsequent sales growth expectations should not be too high.The main brand sold 117.50,000 kiloliters, an increase of 8 in ten years.5%, the proportion increased by 1 pct to 54.2%; sales of other brands such as Laoshan were 990,000 liters, an increase of 4.3%, sales of low-end products resumed growth.High-end products such as August, Fortune, Classic 1903, and Draft Beer achieved sales of 58 in the first quarter.80,000 liters, an increase of 10 in ten years.5%, accounting for 27% (driven by the Spring Festival in the first quarter, high-end products accounted for the highest in ten years). The core logic of mid- to high-end product upgrades continued to be interpreted, and the price increase effect since last year has gradually emerged.Began to shrink, and still further raise prices in early 19), and jointly promoted the increase in the price of wine per ton.8% to 3,671 yuan / kilogram. The pressure of rising costs was dealt with in advance, and the strategy of “increasing fees and costs” continued to emerge.Gross profit margin for the first quarter was 39.7%, a slight decrease of 0 every year.4pct, and, the cost per ton of wine is 2215 yuan per kiloliter, an increase of more than 3.5%, 19 years of cost pressures have been reflected, but the company is ready to respond in advance.Selling expense ratio 17.5%, a decline of 0 per year.5pct, the company’s cost-effective strategy continues to show, the management expense ratio3.5%, a decline of 0 per year.4pct, Q3 single quarter net margin 10.6%, increasing by 0 every year.9 points. The industry’s long-term logic has been continuously verified, and cost pressures are expected to hedge during the year, and company reforms are expected to promote breakthroughs.We published reports last year to sort out the industry’s medium- and long-term logic. Under the existing game, high-end production has accelerated the expansion of production capacity optimization (Tsingtao closed two factories in 18 years, and grassroots analysis feedback predicts that it will continue to advance in 19 years). The long logic of profit improvement continues.Looking at the dimensions within 19 years, the pressure on cost growth of barley and glass is still obvious, and subsequent seasons will gradually transform. However, we judge that the price increase effect appears, the high-end continues to advance, and the benefits of tax reduction policies can be replaced. The profit margin is still expected to be stable.Improved distribution.For companies, we look forward to the company’s structural reforms making substantial progress and driving breakthrough growth. The continuous rise in the bottom has been confirmed, but the short-term expectations should not be too high, and the 杭州桑拿网 “prudent recommendation-A” rating is temporarily maintained.The company continued to improve the trend in the first quarter. The core logic should still look at the high-end to drive the increase in ton prices and continue to drive growth. The sales volume is not expected to be too high. It is recommended that the layout of the industry’s long-term logic does not focus on short-term performance.At the same time, we expect the company to accelerate its reforms and promote breakthroughs.We adjust the EPS forecast for 19-20 to 1.19 and 1.35 yuan, maintain the “prudent recommendation-A” rating. Risk warning: intensified competition in the high-end market, market share is affected