Donghai Securities·2024-08-22 11:30Investment Rating - The report initiates coverage with a "Buy" rating for the company [8]. Core Views - The beer industry continues to trend towards premiumization, maintaining stable volume and increasing prices. The main consumer demographic for beer is aged 18-49, with a projected CAGR of -0.50% for this group from 2023 to 2028, indicating stable beer sales. The average income is expected to rise, supporting a continuous increase in price per ton, with leading brands showing a CAGR in price above the CPI growth rate by over 3 percentage points in the past three years [7][49]. - The 6-10 RMB price range is identified as a key driver for premiumization, benefiting from the expansion of core products. The report highlights that the current beer sales are predominantly low-end, but there is a strong certainty for quality upgrades in the 6-10 RMB price range, driven by the upgrade of low-end products and a decline in high-end demand [7][56]. - The share of non-immediate consumption channels is increasing, with a significant rise in the canned beer ratio. For instance, the non-immediate revenue share for Tsingtao Beer increased from 40% in 2019 to 59% in 2023. The report anticipates that this trend will continue, particularly as the macroeconomic environment remains in weak recovery [7][60]. Summary by Sections 1. Company Overview - Tsingtao Brewery, established in 1903, is a leading representative of domestic beer, with a market position solidified through various strategic phases including expansion, integration, and product structure upgrades. The company has a production capacity of 9.46 million kiloliters and a brand value of 240.689 billion RMB in 2023, ranking first in the beer industry [13][19]. 2. Industry Trends - The beer industry is experiencing a stable competitive landscape with the top five companies holding over 75% market share. The report notes that the industry has transitioned into a phase of stable volume and price increases, with premiumization being a key trend [40][43]. 3. Financial Performance - The company reported total revenue of 33.937 billion RMB in 2023, with a year-on-year growth of 5.49%. The net profit attributable to shareholders was 4.268 billion RMB, reflecting a growth of 15.02%. The report forecasts net profits of 4.848 billion RMB, 5.385 billion RMB, and 5.940 billion RMB for 2024, 2025, and 2026, respectively, with corresponding EPS of 3.55, 3.95, and 4.35 RMB [9][27]. 4. Competitive Advantages - Tsingtao Brewery has a strong brand influence and a well-established product matrix in the mid-to-high-end market. The company has consistently launched high-value products and optimized its channel structure to enhance sales efficiency [8][30]. The report emphasizes the importance of brand recognition and product quality in driving consumer preferences in the premium segment [56].