Yanjing Brewery(SZ:000729) Guotai Junan Securities·2024-06-07 00:01Investment Rating - Maintain "Overweight" rating with a target price of CNY 12.3 [3][5] Core Views - U8 sales continue to grow rapidly, driving overall sales growth faster than the industry. U8 sales are expected to grow over 30% YoY from January to May 2024, with acceleration in May [3] - The company is strengthening its position in dominant markets, expanding in growth markets like Northeast China, Sichuan, and Shandong, and developing weaker markets through the "Hundred Counties Project" [3] - Organizational restructuring and incentive optimization have significantly improved subsidiary profitability and employee efficiency [3] - Supply chain digitization and centralized procurement have enhanced cost control, with expected reductions in raw material costs such as malt, glass bottles, and cans [3] Financial Summary - Revenue is projected to grow from CNY 14,213 million in 2023 to CNY 17,232 million in 2026, with a CAGR of 6.6% [4] - Net profit attributable to shareholders is expected to increase from CNY 645 million in 2023 to CNY 1,492 million in 2026, with a CAGR of 30.3% [4] - EPS is forecasted to rise from CNY 0.23 in 2023 to CNY 0.53 in 2026 [4] - ROE is expected to improve from 4.7% in 2023 to 9.4% in 2026 [4] Market and Valuation - The company's market cap is CNY 26,438 million, with a total of 2,819 million shares outstanding [6] - The stock's 52-week price range is CNY 7.78 to CNY 13.21 [6] - Current P/E ratio is 41.01x, expected to decline to 17.72x by 2026 [4] Strategic Initiatives - The company is focusing on product diversification, with plans to introduce smaller 256ml U8 bottles for nightlife channels and canned U8 for broader distribution [3] - Increased investment in strategic, high-growth, and high-structural urban markets, avoiding price wars [3] - Ongoing digital transformation and factory optimization are expected to yield long-term efficiency gains [3]