News Alert: Tsingtao Brewery announced preliminary FY21 results with 43% y-o-y attributable profits growth and 21% y-o-y core profit growth, above our expectation

  • Tsingtao Brewery announced its FY21 profit alert with net profit up 43% y-o-y to RMB3,150mn and core profit up 21% y-o-y to RMB2,194mn, above our expectation.
  • Gain on the land resumption was RMB436m, in line with previous announcement.
  • Our last rating was HOLD/FV for H/A share, with TPs of HK$64.20/RMB81.43, and target prices currently under review with positive outlook for 2022.

What’s New

  • Tsingtao Brewery announced its FY21 preliminary results with net profits up 43% y-o-y to RMB3,150mn, c.13% higher than the market’s FY21 forecasts, mainly due to the earlier-than-expected recognition of disposal gain on the land parcel located in Yangjiaqun, Qingdao, as a result of the completion of land resumption by the government.
  • Core profit was up 21% y-o-y to RMB2,194mn, above our previous expectation. Implied core loss in 4Q21 was c.RMB1bn, likely due to the impacts of COVID outbreaks in certain cities where Tsingtao Brewery operates, including Xi’an in Dec’21.
  • Tsingtao Brewery’s gain on the land resumption amounted to RMB436m, in line with the company’s estimate of RMB400m – RMB500m in its previous announcement dated 17 Dec 2021.
  • We maintain positive outlook for 2022 as we expect Tsingtao Brewery to continue making progress in premiumization strategies.
  • Our last rating was HOLD/FV for H/A share, with TPs of HK$64.20/RMB81.43. Target prices are currently under review.