At the close of trading on November 1, Chongqing Beer rose 5.08%, and Tsingtao Beer fell 9.25%, approaching a stop. The two companies jointly announced the three quarterly reports on October 28, but the stock price has diverged, what happened?
The performance of the third quarter report is diverging
Chongqing Beer revenue was 4.048 billion yuan, an increase of 18.0% year-on-year, and net profit was 422 million yuan, an increase of 33.4% year-on-year. In the first three quarters, Chongqing Beer achieved beer sales of 2.4168 million kiloliters, an increase of 18.29% year-on-year.
Tsingtao Beer's revenue was 8.48 billion yuan, down 3.01% year-on-year, and net profit was 1.195 billion yuan, up 6.43% year-on-year. In the first three quarters, Tsingtao Beer achieved beer sales of 7.082 million kiloliters, an increase of 2.02% year-on-year, of which Q3 achieved sales of 2.312 million tons in the single quarter, down 8.8% year-on-year.
The volume of price reduction has increased, and the structure of the beer industry has become high-end
Beer in 2005 began to show a double growth trend in production and sales, in 2013 reached its peak, the total output and sales of more than 50 million kiloliters, and then from 13 years to the present all the way down, as of July 2021, China's beer production reached 22.723 million kiloliters, from 13 years of 50 million kiloliters to the present waist cut.
There are two reasons: the slowdown in the population growth of the main consumer group aged 20-50 and the decline in per capita consumption 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.
And the domestic beer market is highly concentrated, China Resources Beer, Tsingtao Beer, Yanjing Beer, AB InBev and Chongqing Beer five major groups respectively divided the Chinese beer market share of 92%, relatively stable.
Therefore, as early as 15 years ago, brewers have successively changed their business strategies, proposed high-end beer, and tested the high-end of the water with the goal of changing the proportion of low-end and high-end.
The growth trend of high-end has been verified by data
According to Oreh data, the proportion of sales of high-end beer in China (retail price of more than 14 yuan / liter) increased from 2% in 2006 to 11% in 2020, and sales increased from 719,700 kiloliters to 4,742,100 kiloliters, with a CAGR of 14.42%. High-end beer sales have increased from 8% in 2006 to 35% in 2020, and the proportion of sales has exceeded that of low-end beer.
From 2014 to 2019, the compound growth rate of high-end beer sales was 16%; the compound growth rate of mid-range beer sales was 7%; and the sales of low-end beer fell sharply, with a compound growth rate of -3%. The sales growth rate of low-end beer and mid-to-high-end beer has diverged, indicating that there is a trend of high-end products in the beer industry.
Chongqing Beer: The proportion of high-end products increased by 7 points in the first 9 months, and the growth rate exceeded 50%.
According to the classification of Chongqing beer, high-end products of 10 yuan and above, mainstream products of 6-9 yuan and economic products of less than 6 yuan have achieved revenue of 3.964 billion, 5.539 billion and 1.47 billion yuan in the first three quarters of this year, respectively. The growth rate of the three is 54%, 13% and 11% respectively from high to low. According to the proportion statistics, the proportion of the three is 36%, 51% and 13% respectively.
The proportion of the three products in the 2020 annual report was 29.83%, 54.04% and 13.26%, respectively. In other words, heavy beer has lifted the structure of high-end products up by nearly 7 points in the past 9 months. The hero is still the Usu and 1664, which are in the process of nationalization.
Tsingtao Beer: Sales of high-end brands fell by 17.4%
The main brand of Tsingtao Beer achieved sales of 1.256 million kiloliters, unchanged year-on-year, while sales of other brands were 1.057 million kiloliters, down 17.4% year-on-year. The revenue growth rate of thousand liters of wine slowed slightly from Q2.
In addition, the cost of tonnage of wine in 2021Q3 increased by 6.9% year-on-year to 2124 yuan / kiloliter, further improving from Q2. The prices of main packaging materials have risen sharply and the low-priced raw materials in the early stage have been gradually digested, while the decline in sales in the third quarter has led to a reduction in fixed cost dilution.
Obviously, the high-end of Tsingtao Beer is not satisfactory, Tsingtao Beer said that under the epidemic situation in the third quarter, high-end drinking channels such as night shows have been significantly affected. This is completely different from the disclosure of Chongqing Beer in the video conference, due to the recovery of fresh drinks and tourism markets, the growth rate of Wusu Q3 in Xinjiang reached 54%, and the overall first three quarters, under the implementation of the big city strategy, the sales of Wusu outside Xinjiang increased by 75%, and 1664 also rose by 39%, which also caused the differentiation of the performance of the two companies.
CITIC Construction Investment released a research report saying:
Since the third quarter, the peak season sales of the beer sector have been affected, and the sales volume is expected to decline in single digits; However, the trend of high-end product structure remains unchanged. It is expected that the product structure upgrade in 2021 will lead to an increase in the price of ton wine enough to cover the decline in sales, thereby driving profitability improvement. In the medium and long term, the beer sector is still in a 3-5 year high-end structure upgrade to contribute to the profit release dividend period, CITIC Construction Investment recommends paying attention to the progress of price increases in the later period and the progress of high-end structure improvement of mainstream beer companies.
The latest price increase strategy of Tsingtao Beer and Chongqing Beer
Tsingtao Beer: Recently, the 500m Qingdao pure raw terminal guidance box price in The 500m Qingdao Pure Raw Terminal Guidance Box in Shandong Jiaodong Region has increased by about 6 yuan, the price increase is about 5%, the factory price has not been mentioned for the time being, and it is expected that the factory price will be raised after 1-2 weeks; at the same time, the channel research has learned that the South China region of Qingdao Beer is expected to raise the price of classic and pure raw in September and October this year.
Chongqing Beer: The box price of the large Wusuwang packaging outside Xinjiang has increased by about 6 yuan, the price increase is more than 10%, and it is planned to be implemented in September; 330ml small bottle of Wusu will be upgraded with liquor, and the box price will be increased at the same time, the specific price increase is undecided, and it is planned to be implemented in September.