Jinwu Financial News | According to Orient Securities Research Report, China Resources Brewery (00291) announced its 2023 results, achieving annual revenue of 38.93 billion yuan (yoy +10.4%) and net profit of 5.15 billion yuan (yoy +18.6%); 23H2 achieved revenue of 15.06 billion yuan (yoy +5.7%) and net profit of 50 billion yuan (yoy -7.0%). The results were basically in line with expectations.
According to the bank, in 2023, the liquor business achieved revenue of 2.07 billion yuan and an EBIT of 130 million yuan. Excluding amortization of intangible assets resulting from the acquisition of Guizhou Sands, the EBIT was 800 million yuan, and the EBIT ratio was 38.6%. The bank anticipates a year-on-year decline in revenue from Jinsha Liquor Industry on the 23rd, mainly due to declining popularity of soy wine, pressure on the sub-high-end business scenario, and inventory accumulation. The company firmly promoted the strategy of “stabilizing prices, removing inventory, and losing burdens” for Sands in '23. At the end of '23, dealer inventory dropped 30% compared to the beginning of the year; at the same time, it actively sorted out the product line, adjusted the market order for the original products, and launched new products such as Sands Sauces, which is expected to promote the resumption of performance growth.
Based on the 23-year results announcement, the bank lowered revenue and raised the sales expenses ratio for 24-25; considering the marginal decline in Australian and wheat prices, the 24-25 gross profit margin was raised. The bank predicts that the company's earnings per share for 2023-2025 will be 1.59, 1.88, and 2.18 yuan, respectively (the original forecast was 1.67, 2.03, and 2.44 yuan for 23-25). Combined with comparable companies, the bank believes that the current reasonable valuation level of the company is 20 times the price-earnings ratio of 24 years. Based on the HKD/RMB exchange rate of 0.92, the corresponding target price is HK$40.81, maintaining the purchase rating.