Eastroc Beverage(SH:605499)2024-06-26 14:30Investment Rating - The investment rating for the company is "Recommended" (maintained) [1] Core Views - The company plans to establish a production base in Kunming, Yunnan, with a total investment of 1 billion yuan, aiming to enhance its market share in the Southwest region and improve transportation efficiency [1] - The Southwest region currently accounts for a lower revenue share compared to other growing regions, indicating potential for growth [1] - The establishment of the Yunnan base is expected to strengthen the growth of the company's specialty drinks and diversify its product offerings by leveraging local agricultural advantages [1] - The company anticipates a high growth rate in the specialty drink segment, with projected revenue growth rates of 32.42%, 30.87%, 25.07%, and 22.10% from 2023 to 2026 [1][2] Summary by Sections Company Overview - The company is focusing on deepening its presence in the Southwest market, which has a large population and significant growth potential [1] - The establishment of the Kunming base is expected to alleviate capacity pressure from the Chongqing subsidiary, which is currently operating at a 93% utilization rate [1] Financial Projections - Projected revenues for 2023, 2024, 2025, and 2026 are 11,262.79 million yuan, 14,740.00 million yuan, 18,435.32 million yuan, and 22,509.52 million yuan respectively [2] - Net profit forecasts for the same years are 2,039.77 million yuan, 2,729.31 million yuan, 3,449.48 million yuan, and 4,321.40 million yuan [2] - The company expects a significant increase in earnings per share (EPS) from 5.10 yuan in 2023 to 10.80 yuan in 2026 [2] Market Outlook - The company is well-positioned to benefit from favorable weather conditions and a strong product matrix, which is expected to drive sales growth in the upcoming seasons [1] - The company is also focusing on expanding its product categories, including tea and coffee, to enhance its competitive edge [1]