Results first-take: FY21 earnings grew 43%, in line with profit alert and our expectations
- FY21 revenue grew 8.7% y-o-y to RMB30.7bn, in line. Sales volume grew slightly by 1.8% to 7.9m KL.
- Attributable profit/core profit rose 43%/22% to RMB3.2bn/RMB2.2bn, in line with profit alert and our expectations.
- Final DPS of RMB1.1 proposed, at payout of 47%. Our current rating is a BUY, with TP of HK$91.47 for H share and RMB98.97 for A share.
What’s New
- FY21 revenue grew 8.7% y-o-y to RMB30.7bn, in line.
- Sales volume increased by 1.8% to 7.9m KL in FY21 (included 12% volume growth of the Tsingtao main brand). In 4Q21 alone, sales volume dropped by 3.4%, largely attributable to impacts from the COVID-19 resurgence.
- Average selling price was up 7% riding on product-mix enhancement.
- Reported gross margin expanded by 1.3ppt to 36.7% in FY21. Gross margin before the reclassification of transportation costs also went up by 1.4ppt to 41.4%.
- RMB571m gain on disposal of land that was claimed back by the Qingdao government was recognised.
- Attributable profit grew by 43% to RMB3.2bn, while core profit rose 22% to RMB2.2bn, both in line with profit alert and our expectations.
- Final DPS of RMB1.1 was proposed for FY21, representing a payout ratio of 47%.
- Despite near-term pressure from COVID outbreaks in China and rising raw material costs, we expect Tsingtao Brewery could attain supportive gross margins and ASP growth in FY22/FY23 given its ongoing premiumisation efforts.
- Our current rating is a BUY, with TP of HK$91.47 for H share and RMB98.97 for A share.