Investment Rating - The report assigns a "Hold" rating to Tsingtao Brewery-H (168 HK) with a target price of HK52.55 [3] - The rating was downgraded from "Buy" to "Hold" due to a weaker macro environment and lower growth expectations [4][10] Core Views - Tsingtao Brewery's sales decline is expected to narrow in 4Q24, with a projected year-on-year drop of 2.7%, compared to a 5.1% drop in 3Q24 [8] - The company's gross margin is expected to benefit from lower raw material costs, with a 1.6% year-on-year decline in cost per ton [8] - Adjusted net loss is expected to narrow slightly to RMB 625 million in 4Q24 from RMB 714 million in 4Q23, driven by better gross margins and operating expense control [8] - The new chairman is expected to continue the current strategy, focusing on efficiency improvement and margin expansion [9] - Revenue and net profit are expected to grow at a single-digit rate in 2025, with free cash flow increasing from RMB 1.2 billion in 2023 to RMB 2.6 billion in 2024, providing room for shareholder returns [9] Financial Performance and Forecasts - Revenue for 2024E is projected at RMB 29.527 billion, a 6.4% decline from 2023A, while 2025E revenue is expected to grow by 3.0% to RMB 30.418 billion [12] - Adjusted EPS for 2024E is forecasted at RMB 3.16, a 3% decline from the previous estimate of RMB 3.25 [4] - Adjusted net profit for 2025E is expected to grow by 7.7% to RMB 4.662 billion, with free cash flow increasing significantly [9] - Gross margin is expected to improve to 35.9% in 2024E and 36.2% in 2025E, driven by stable raw material prices [15] Valuation and Peer Comparison - The target price of HK$56.20 is based on a 7.6x 2025E EV/EBITDA multiple, in line with global peers [10] - Tsingtao Brewery-H's 2025E P/E ratio of 14.3x is comparable to its domestic peers, such as China Resources Beer (12.2x) and Budweiser APAC (13.9x) [16] - The company's 2025E EV/EBITDA multiple of 6.9x is slightly lower than the global peer average of 7.6x [16] Market and Industry Outlook - The domestic beer market is expected to stabilize, with Tsingtao Brewery's sales volume projected to grow by 1.0% in 2025, while the average price per ton is expected to increase by 2.0% [9] - The government is expected to continue introducing consumption stimulus plans to aid market recovery [9] - Competition in the high-end beer market may ease, potentially benefiting Tsingtao Brewery's revenue growth [23] Key Adjustments - Revenue forecasts for 2024E/2025E/2026E were lowered by 1.8%/3.1%/3.1% due to weaker-than-expected domestic consumption recovery [14] - Adjusted EPS forecasts for 2024E/2025E/2026E were revised down by 2.8%/7.1%/6.9% [15] - Gross margin forecasts for 2025E/2026E were reduced by 1.0/0.9 percentage points, reflecting lower-than-expected price growth [14]
青岛啤酒股份：4Q24预览：2025年增速加快，现金流夯实；下调评级至“持有”