Tsingtao Brewery(SH:600600)2024-09-01 07:31Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation that the company's stock price will outperform the benchmark index by more than 20% over the next 6-12 months [4][9]. Core Views - The company reported a revenue of 20.07 billion RMB for the first half of 2024, a decrease of 7.1% year-on-year, while the net profit attributable to the parent company was 3.64 billion RMB, an increase of 6.3% year-on-year [4][6]. - The main brand's performance was subdued, with a decline in sales volume and pressure on unit prices in the second quarter of 2024 [4][6]. - Cost benefits are accelerating, leading to improved profitability despite revenue declines, with a focus on high-quality development and inventory management [4][6]. Summary by Sections Financial Performance - In 1H24, the company achieved a revenue of 20.07 billion RMB, down 7.1% year-on-year, with a net profit of 3.64 billion RMB, up 6.3% year-on-year [4][6]. - The average selling price per ton in 1H24 was 4,335 RMB, with sales volume decreasing by 7.8% to 463 million hectoliters [4][6]. - The gross margin improved to 41.6%, up 2.4 percentage points year-on-year, due to a significant reduction in unit costs [4][6]. Cost and Expenses - The unit cost in 2Q24 decreased by 5.4% year-on-year, contributing to a 3.1% reduction in unit costs for 1H24 [4][6]. - Selling expenses were managed prudently, with a slight decrease in the selling expense ratio [4][6]. Future Outlook - Short-term revenue growth may face challenges due to weak consumer demand, but the company expects double-digit growth in net profit for 2024 due to cost benefits [4][6]. - The company is committed to high-quality development and has been enhancing inventory management, which is expected to support stable operations in the future [4][6]. Valuation - The adjusted earnings per share (EPS) estimates for 2024-2026 are 3.45 RMB, 3.73 RMB, and 3.99 RMB, representing year-on-year growth rates of 10.1%, 8.3%, and 7.0% respectively [5][6]. - The price-to-earnings (P/E) ratios for the same period are projected at 17.3, 15.9, and 14.9 times [5][6].