In the first half of this year, leading beer companies had obvious features of “price increase and decrease”, and beer sales recovered in the second quarter.
According to the National Bureau of Statistics, in the first half of this year, due to the impact of the epidemic, the output of the domestic beer industry fell by 2% year-on-year. Benefiting from the high-end beer, beer companies showed the characteristics of price increase and decrease in volume in the first half of the year. At the same time, the sales volume rebounded significantly in the second quarter, but the cost pressure was gradually revealed.
What impact has the half-year epidemic brought to beer companies? The answer may be “price increase and volume decrease”.
On the evening of August 25, Tsingtao Brewery disclosed its 2022 semi-annual report. The revenue in the first half of the year was about 19.273 billion yuan, an increase of 5.73% year-on-year (compared to the same period of the previous year), and reached 60% of the revenue in 2021; Net profit was 2.852 billion yuan, an increase of about 18% year-on-year. After deducting non-recurring gains and losses such as government subsidies of 240 million yuan, net profit increased by about 20% year-on-year; basic earnings per share were 2.1 yuan per share.
In the first half of the year, the overall sales volume of Tsingtao Brewery decreased by 1.03% year-on-year to 4.72 million kiloliters, of which the sales volume in the first quarter fell by 0.2% year-on-year to 2.129 million kiloliters. Based on this calculation, Tsingtao Brewery sold 2.591 million kiloliters in the second quarter, with a year-on-year growth rate of nearly 0.5%. Beer sales in the second quarter showed signs of recovery.
The financial report pointed out that the company’s product structure was optimized in the first half of the year, which drove the year-on-year increase in revenue during the period. In the first half of the year, the sales volume of the main brand Tsingtao Beer was 2.6 million kiloliters, a year-on-year increase of 2.8%; the sales volume of mid-to-high-end and above products was 1.66 million kiloliters, a year-on-year increase of 6.6%. In the first half of the year, the price of wine per ton was about 4,040 yuan, an increase of more than 6% year-on-year.
At the same time as the ton price increased, Tsingtao Brewery launched the “Summer Storm” campaign during the peak season from June to September. Everbright Securities channel tracking shows that the cumulative sales volume of Tsingtao Brewery from January to July has achieved positive growth. In addition to the demand for the beer industry brought about by the hot weather this summer and the impact of the low base last year, Everbright Securities predicts that the sales volume of Tsingtao Beer in the third quarter is expected to increase significantly year-on-year. .
Shenwan Hongyuan’s research report on August 25 pointed out that the beer market began to stabilize in May, and Tsingtao Brewery achieved high single-digit growth in June, due to the approaching peak season and post-epidemic compensatory consumption. Since the peak season of this year, affected by the high temperature weather, downstream demand has recovered well, and there is a need for replenishment at the superimposed channel side. Therefore, Shenwan Hongyuan expects that Tsingtao Beer sales in July and August are expected to maintain high single-digit growth.
China Resources Beer announced its results for the first half of the year on August 17. Revenue increased by 7% year-on-year to 21.013 billion yuan, but net profit fell by 11.4% year-on-year to 3.802 billion yuan. After excluding the income from the sale of land by the group last year, the net profit for the same period in 2021 will be affected. After the impact of China Resources Beer’s first half of the year, the net profit of China Resources Beer increased by more than 20% year-on-year.
In the first half of the year, affected by the epidemic, the sales volume of China Resources Beer was under pressure, down slightly by 0.7% year-on-year to 6.295 million kiloliters. The implementation of high-end beer was also affected to a certain extent. The sales volume of sub-high-end and above beer increased by about 10% year-on-year to 1.142 million kiloliters, which was higher than that of the previous year. In the first half of 2021, the growth rate of 50.9% year-on-year slowed down significantly.
According to the financial report, in order to offset the pressure of rising costs, China Resources Beer moderately adjusted the prices of some products during the period, and the overall average selling price in the first half of the year increased by about 7.7% year-on-year. China Resources Beer pointed out that since May, the epidemic situation in most parts of mainland China has eased, and the overall beer market has gradually returned to normal.
According to Guotai Junan’s August 19 research report, channel research shows that China Resources Beer is expected to see a high single-digit growth in sales from July to early August, and the annual sales may be expected to achieve positive growth, with sub-high-end and above beer returning to high growth.
Budweiser Asia Pacific also saw a decrease in price increases. In the first half of the year, Budweiser Asia Pacific’s sales in the Chinese market fell by 5.5%, while revenue per hectoliter increased by 2.4%.
Budweiser APAC said that in the second quarter, “channel adjustments (including nightclubs and restaurants) and an unfavorable geographic mix severely impacted our business and underperformed the industry” in the Chinese market. But its sales in the Chinese market recorded nearly 10% growth in June, and sales of its high-end and ultra-high-end product portfolio also returned to double-digit growth in June.
Under the pressure of cost, leading wine companies “live tight”
Although the price per ton of beer companies has been rising, the cost pressure has gradually emerged after the sales growth has slowed down. Perhaps dragged down by the rising cost of raw materials and packaging materials, China Resources Beer’s cost of sales in the first half of the year increased by about 7% year-on-year. Therefore, although the average price in the first half of the year increased by about 7.7%, the gross profit margin of China Resources Beer in the first half of the year was 42.3%, which was the same as the same period in 2021.
Chongqing Beer is also affected by rising costs. On the evening of August 17, Chongqing Beer disclosed its 2022 semi-annual report. In the first half of the year, revenue increased by 11.16% year-on-year to 7.936 billion yuan; net profit increased by 16.93% year-on-year to 728 million yuan. Affected by the epidemic in the second quarter, the sales volume of Chongqing beer was 1,648,400 kiloliters, an increase of about 6.36% year-on-year, which was slower than the sales growth rate of over 20% year-on-year in the same period last year.
It is worth noting that the revenue growth rate of Chongqing Beer’s high-end products such as Wusu also slowed down significantly in the first half of the year. The revenue of high-end products above 10 yuan increased by about 13% year-on-year to 2.881 billion yuan, while the year-on-year growth rate exceeded 62% in the same period last year. In the first half of the year, the ton price of Chongqing beer was about 4,814 yuan, a year-on-year increase of more than 4%, while the operating cost increased by more than 11% year-on-year to 4.073 billion yuan.
Yanjing Beer is also facing the challenge of slowing growth in the mid-to-high end. On the evening of August 25, Yanjing Beer announced its interim results. In the first half of this year, its revenue was 6.908 billion yuan, a year-on-year increase of 9.35%; its net profit was 351 million yuan, a year-on-year increase of 21.58%.
In the first half of the year, Yanjing Beer sold 2.1518 million kiloliters, a slight increase of 0.9% year-on-year; inventory increased by nearly 7% year-on-year to 160,700 kiloliters, and the ton price increased by more than 6% year-on-year to 2,997 yuan / ton. Among them, the revenue of mid-to-high-end products increased by 9.38% year-on-year to 4.058 billion yuan, which was significantly slower than the growth rate of nearly 30% in the same period of the previous year; while the operating cost increased by more than 11% year-on-year to 2.128 billion yuan, and the gross profit margin decreased by 0.84% year-on-year. percentage point to 47.57%.
Under cost pressure, leading beer companies tacitly choose to control fees.
“The Group will implement the concept of ‘to live a tight life’ in the first half of 2022, and take a number of measures to reduce costs and increase efficiency to control operating expenses.” China Resources Beer admitted in its financial report that risks in the external operating environment are superimposed, and it has to “tighten up” belt”. In the first half of the year, China Resources Beer’s marketing and advertising expenses decreased, and selling and distribution expenses decreased by approximately 2.2% year-on-year.
In the first half of the year, Tsingtao Brewery’s sales expenses contracted by 1.36% year-on-year to 2.126 billion yuan, mainly because individual cities were affected by the epidemic, and expenses fell; management expenses decreased by 0.74 percentage points year-on-year.
However, Chongqing Beer and Yanjing Beer still need to “conquer cities” in the process of high-end beer by investing in market expenses, and the expenses during the period both increased year-on-year. Among them, the sales expenses of Chongqing Beer increased by nearly 8 percentage points year-on-year to 1.155 billion yuan, and the sales expenses of Yanjing Beer increased by more than 14% year-on-year to 792 million yuan.
The research report of Zheshang Securities on August 22 pointed out that the increase in beer revenue in the second quarter was mainly due to the increase in ton price brought about by structural upgrades and price increases, rather than sales growth. Due to the shrinkage of offline promotion and promotion expenses during the epidemic.
According to the research report of Tianfeng Securities on August 24, the beer industry accounts for a high proportion of raw materials, and the prices of bulk commodities have gradually risen since 2020. However, at present, the prices of bulk commodities have turned inflection points in the second and third quarters of this year, and corrugated paper is the packaging material. , aluminum and glass prices have obviously loosened and declined, and the price of imported barley is still at a high level, but the increase has slowed down.
The research report released by Changjiang Securities on August 26 predicts that the profit improvement brought by the price increase dividend and product upgrade is still expected to continue to be realized, and the profit elasticity driven by the marginal decline in the prices of raw materials such as packaging materials is expected to receive more in the second half of the year and next year. reflect.
The research report of CITIC Securities on August 26 predicted that Tsingtao Brewery will continue to promote high-end production. Under the background of price increases and structural upgrades, the increase in ton price is expected to offset the pressure caused by the upward cost of raw materials. The research report of GF Securities on August 19 pointed out that the high-endization of China’s beer industry is still in the first half. In the long run, China Resources Beer’s profitability is expected to continue to improve under the support of product structure upgrades.
Tianfeng Securities’ research report on August 24 pointed out that the beer industry has improved significantly month-on-month. On the one hand, with the easing of the epidemic and boosting consumer confidence, the consumption of the ready-to-drink channel scene has warmed; Sales are expected to accelerate. Under the overall low base last year, the sales side is expected to maintain good growth.