In recent years, the alcoholic beverage sector has flourished in the capital market, but most of the limelight has been snatched away by liquor stocks. The performance of other liquor stocks such as beer and wine is relatively less prominent.
Judging from the stock price trend, the liquor sector has also been significantly better than the beer sector since 2015. However, benefiting from consumers' stable consumption preferences for beer, as well as the market integration and product upgrading of beer manufacturers, the growth rate of beer production and sales and revenue of listed companies is stable, driven by performance, the long-term support for stock prices is still there, and the overall performance of the beer sector is also significantly better than the general trend.
In recent days, the theme of inflation has continued to arouse the market's high attention, following the announcement of price increases by Haitian and Qiaqia Food, the market's expectations for beer price increases have heated up again, which has also stimulated the collective strengthening of Hong Kong A beer stocks today.
As of the close, A-share Tsingtao Beer rose to a halt, Chongqing Beer rose more than 4%, Pearl River Beer rose more than 2%; Hong Kong stock Qingdao Beer rose nearly 8%, China Resources Beer rose nearly 5%, budweiser Asia Pacific rose nearly 4%.
In this context, has Tsingtao Beer, as the leading stock in the beer industry, reached an inflection point?
<h1 toutiao-origin="h3" >01 the performance does not move the stock price</h1>
Speaking of Tsingtao Beer, it must be mentioned that this enterprise is a milestone for both state-owned enterprises and the Hong Kong stock market, because Tsingtao Beer is the first state-owned enterprise listed overseas in China and the first state-owned enterprise listed in Hong Kong. Founded in 1903 as the state-owned Qingdao Brewery, it is the oldest brewery in China, and was listed as the first H-share in Hong Kong in 1993.
On August 26, Tsingtao Beer released the first half of this year's performance report, achieving operating income of 18.29 billion yuan, an increase of 16.66% year-on-year, and net profit attributable to the mother of 2.416 billion yuan, an increase of 30.22% year-on-year.
However, after the release of this seemingly "beautiful" financial report, the market does not seem to be buying. Tsingtao Beer's stock price rose only 0.64% on August 26, and then began to appear box shocks, which have been hovering around 90 yuan.
Due to the impact of the new crown epidemic last year, Tsingtao Beer's performance data fluctuated abnormally, and the growth data will be distorted to a certain extent. Therefore, compared with the data in 2019, it can better reflect the performance growth rate of Tsingtao Beer.
In the first half of 2019, Tsingtao Beer achieved operating income of 16.551 billion yuan, an increase of 9.22% year-on-year; net profit attributable to the mother was 1.631 billion yuan, an increase of 25.21% year-on-year. Compared with the performance data of 2019, Tsingtao Beer's product sales in the first half of this year only increased by 0.8%, operating income increased by 10.51%, and net profit attributable to the mother increased by 48.13%.
It can be seen that although Tsingtao Beer's revenue and net profit attributable to the mother have achieved good growth, product sales have almost stagnated. This may be the reason why Tsingtao Beer's stock price did not increase but fell.
Behind the low growth rate of Tsingtao beer product sales is the change in the consumption habits of the Chinese people, and Chinese consumers generally do not like to drink beer. Since 2005, China's total beer production and sales have shown a significant growth trend, and reached a peak in 2013, with total output and sales exceeding 50 million kiloliters. As of July 2021, China's beer production reached 22.723 million kiloliters, a cumulative year-on-year increase of 7.50%; a slight decrease compared with 2019.
The slowdown in the growth of the 20-50-year-old population and the increase in per capita consumption of the main consumer group are compressing the future growth space of beer production. At present, China's per capita beer consumption has reached 36.2L/year, and the difference between Japan (43.8L/year) and South Korea (37.2L/year), which have similar consumption habits, is not large, and the room for improvement is relatively limited.
In such an industry background, the consumption concept of "drinking less and drinking good wine" has gradually been accepted and recognized by more and more consumers, and high-end beer has become more and more popular with consumers. The high-end beer market better caters to the needs of market development, and there is further upside in volume and price, and the transformation seems to be imminent.
<h1 toutiao-origin="h3" >02 high-end is not easy to do</h1>
Since 2018, Tsingtao Beer has changed its previous strategy of competing for market share with low-end price wars, and turned to profit-oriented and strengthened product structure upgrading. Since 2020, Tsingtao Beer has accelerated the speed of launching high-value-added products, developing and launching ultra-high-end new products such as "Centennial Journey and Amber Lager".
In recent years, the overall sales volume of Tsingtao Beer has remained basically stable. From 2018 to 2020, the company achieved product sales of 8.03 million kiloliters, 8.05 million kiloliters and 7.82 million kiloliters, respectively. Among them, the main brand Tsingtao Beer achieved sales of 3.914 million kiloliters, 4.051 million kiloliters and 3.879 million kiloliters respectively, regardless of the impact of the epidemic in 2020, the main brand Tsingtao Beer achieved 3.97% and 3.49% growth in 2018 and 2019, respectively, and the main brand of Tsingtao Beer has always been in a steady growth channel.
In terms of high-end products, the growth trend is particularly obvious, in the first half of 2020, Tsingtao Beer's high-end products such as "Agut, Hongyun Dangtou, Classic 1903, Pure Draft Beer" achieved a total sales volume of 971,000 hectolitres. In the first half of 2021, the company's sales of high-end products achieved a year-on-year increase of 41.4%.
The increase in the proportion of high-end beer will inevitably bring about a higher price of tons of wine. In 2018, the unit price of Tsingtao Beer was 3267 yuan per thousand liters, and in 2020, the unit price was raised to 3496 yuan, and in the first half of 2021, it has reached 3781 yuan. While the proportion of high-end liquor has increased and the revenue per ton of wine has continued to increase, the gross profit margin of Tsingtao Beer has increased from 37.7% in 2018 to 44.4% in the first half of 2021, and the gross profit margin has also reached a new high.
However, in the field of high-end beer, the competitiveness of Tsingtao Beer does not seem to be strong. Foreign brands have long occupied the largest market share of high-end beer.
As the largest beer company in the Asia-Pacific region, Budweiser Asia Pacific has always occupied a leading position in the Asian high-end and ultra-high-end markets, including Budweiser, Times, Corona, Fujia, Kaishi and Harbin Beer, and the high-end brand Budweiser is the most profitable brand under Budweiser Asia Pacific.
Taking the Chinese market as an example, in the high-end and ultra-high-end brand beer industry, Budweiser Asia Pacific's market share is as high as 46.6%. Although Tsingtao Beer ranks second only to Budweiser in market share, its market share is only 14.4%, less than one-third of its rivals.
At the same time, Tsingtao Beer seems to be more of an upgrade on the basis of the original product, and the new product is the so-called ultra-high-end product. According to the official flagship store of Tsingtao Beer Jingdong, the price of a single bottle of its Century Journey Master Limited Edition of the Year of the Ox is as high as 699 yuan. The price is so outrageous, sales are naturally dismal. It can be seen that in a sense, the high-end of Tsingtao Beer is only a "price increase" strategy under the cover of a small number of ultra-high-end products. This number of roads is very similar to the way China's high-end liquor is played.
In addition, in the high-end market, Tsingtao Beer is facing the catch-up of other domestic beer giants, which are also working in the high-end market. In particular, the largest competitor, China Resources Beer, not only relies on the strength of central enterprises, but also completes the acquisition of Heineken, and the high-end progress is relatively fast.
In November 2020, Hou Xiaohai, CEO of China Resources Beer, said at the distributor conference that the company's goal for 23-25 years is to surpass competitors in the high-end market, while benchmarking international first-class beer companies and becoming a world-class beer company. According to the data, the high-end market share of China Resources Beer is 11%, which is not much different from Tsingtao Beer.
Therefore, Tsingtao Beer's competitive pressure in the high-end market is not small.
< h1 toutiao-origin="h3" >03 epilogue</h1>
Inevitably, rising raw material prices put pressure on the cost side of beer. As of the end of April 2021, the price of cans increased by 44% year-on-year, and the price of glass also increased by 64% year-on-year. At the same time, according to the upstream survey, O.R.G. has increased the price of two-piece cans by 2-3 points/ point, and it is expected that the above factors will jointly promote the cost end of the increase of 4-6 percentage points.
The increase in cost, in turn, will boost the power of the industry's price increase to a certain extent, thereby transferring the cost to downstream consumers. In this way, whether it is the stimulation of the peak consumption season or the push of raw material prices in the context of inflation, the price increase of beer is indeed inevitable.
However, unlike liquor, beer is a typical mass consumer product at home and abroad, and it is difficult to say whether this "price increase" strategy is acceptable to consumers.
However, authoritative securities also pointed out that the current round of consumer goods price increases is driven by costs, and the demand side has not yet fully recovered. It is expected that there will be a short-term increase in valuations, especially for undervalued companies. Among them, the leader with a good competitive pattern took the lead in raising prices, and the amplitude is expected to exceed the cost increase and contribute to profit elasticity.
This article originated from Grand Gateway