Half Year Report Of Beer Enterprises Comes Out One After Another: Output Recovery Still Needs Time, Profit Level Has Reached A New High

        After the European Cup, Olympic athletes are fighting, whether from the weather or events, can only be described as "hot". Beer, accompanied by ball watching, has also entered the hottest sales season of the year. Although the output of the beer industry has not fully recovered to before the epidemic, on the whole, the beer that everyone drinks is getting better and better, and the beer enterprises are making more money than before the epidemic!

According to the data released by China Liquor Industry Association, from January to June, the total liquor production of Enterprises above Designated Size in the national brewing industry reached 28.34 million kiloliters, up 6.8% year on year. Compared with the same period in 2019 before the epidemic, there is still a gap of less than 300000 kiloliters. In the first half of this year, the output of beer enterprises above Designated Size reached 18.89 million kiloliters, up 10% year-on-year, but it has not yet returned to the peak in the first half of 2019, that is, 1.48 million kiloliters.

However, from the perspective of the whole industry, in the first half of this year, the total profit of the whole liquor making industry reached the highest level in history. For the first time, the total profit exceeded 100 billion yuan, reaching 108.4 billion yuan, up 29% year on year. In other words, the total profit of Liquor Enterprises above Designated Size in half a year is equivalent to that of Liquor Enterprises above Designated Size in 2017.

In addition to the liquor industry, which accounts for more than 80% of the total profit of the brewing industry, the beer industry with the largest sales volume also catches up.

China's beer sales will enter an era of slight increase. Picture vision China

Who is the invisible champion of beer profit?

The first is Zhujiang Beer, a "small and beautiful" regional beer enterprise, accounting for about 3% of the national beer sales volume; the second is the "small and beautiful" regional beer enterprise, accounting for about 3% of the national beer sales; One is the sales champion of China Resources beer, accounting for 1 / 3 of the national beer sales; One is Budweiser Asia Pacific, which has the largest market share of high-end and ultra-high-end beer.

On July 29, Budweiser Asia Pacific (01876. HK) semi annual report showed that shareholders of Budweiser Asia Pacific (01876. HK) should account for us $520 million of normalized profit compared with the same period last year, which is $300 million more than that of the same period last year. China Resources Brewery (00291. HK) announced that in the first half of this year, the company's shareholders should account for at least twice the profit on a year-on-year basis.

As early as half a month ago, the first beer company disclosed the semi annual report and announced good news: Zhujiang Beer (002461. SZ) expected to realize the net profit of 295-340 million yuan belonging to shareholders of Listed Companies in the first half of this year, with a year-on-year growth of 20% - 40%.

Compared with the first half of last year, the three breweries are making profits. If compared with before the epidemic, who is the invisible profit champion? In January, the Secretary General of the beer branch of China Liquor Industry Association also said that since the beer production in the first half of 2020 was greatly affected by the epidemic situation, the industry was more willing to compare the data of normal years.

Let's look at the increase in earnings first.

Compared with 210 million yuan in the first half of 2019, the net profit of Zhujiang Beer attributable to shareholders of listed companies increased by 40% - 60% in the first half of this year.

In the first half of this year, according to the performance forecast, the profit attributable to shareholders of China Resources beer should be no less than 4 billion yuan, an increase of 113% compared with the same period in 2019. It is worth mentioning that in addition to the increase of gross profit due to the increase of product sales and average selling price, the compensation for land acquisition is also a huge sum of money. In the first half of this year, the profit ratio of shareholders of China Resources beer increased by 44% over the same period in 2019, which is also a rapid growth.

In contrast, Budweiser Asia Pacific, with a higher profit base, is not as strong as the above two enterprises.

Although Budweiser Asia Pacific should account for us $520 million in the first half of this year, which is more than twice the same period of last year, the larger increase is related to the heavy impact of high-end night market consumption at the beginning of last year, resulting in a loss in the first quarter of last year. Looking back on the first half of 2019, the company's attributable normalized profit was US $650 million, which has not yet recovered to the profit level of that year in the first half of this year.

But Budweiser Asia Pacific is narrowing the performance gap with normal years.

China market is the most important market for Budweiser Asia Pacific sales. According to the company's semi annual report, the company's normalized EBITDA increased by 8.4% in the second quarter of this year, returning to the level of the second quarter of 2019.

Let's look at revenue growth. Pearl River beer and China Resources beer have not yet forecast the relevant data for the first half of this year. Budweiser Asia Pacific annual report first announced that in the first half of this year, the company's revenue increased 26% year-on-year to 3.48 billion US dollars (about 22.4 billion yuan). This is a long way from the revenue of US $3.52 billion (about RMB 23.2 billion) in the first half of 2019.

But in the second quarter of this year, Budweiser Asia Pacific struggled to catch up. The semi annual report shows that its revenue in the quarter increased by 4.6% year-on-year, which is higher than the level in the second quarter of 2019. Despite the repeated outbreaks of new crown in some parts of Guangdong, the income of high-end brand Budweiser still increased year-on-year, driven by the expansion of sales of Budweiser Jinzun in domestic high-end restaurants.

The overall sales of beer have not returned to the pre epidemic level

The competition for profit of beer is the stock competition before the overall scale of beer sales returns to the epidemic situation.

According to the data released by the official micro blog of China Liquor Association, in the first half of the year, the output of beer enterprises above Designated Size achieved 18.89 million kiloliters, an increase of 10% over the same period of last year. But the amount of beer that fell hasn't recovered. In the first half of 2019, the domestic beer production will be 4.48 million kiloliters.

According to the published beer performance forecast and report, compared with the first half of last year, the beer sales of Zhujiang Beer, China Resources beer and Budweiser Asia Pacific are all on the rise, but it is not easy to return to the level before the epidemic.

Budweiser Asia Pacific achieved 4.59 million kiloliters of beer in the first half of the year, with a year-on-year increase of 18%, and its sales volume in China increased more strongly. However, compared with the same period in 2019, Budweiser Asia Pacific still lost 430000 kiloliters of beer sales in the Asia Pacific region. From the perspective of the Chinese market, the total sales gap between the first half of this year and the first half of 2019 is less than 600000 tons.

The decline in sales was mainly reflected in the second quarter of this year.

Budweiser Asia Pacific said in its financial report that in the second quarter of this year, the company's beer sales in China fell by 4.5% year-on-year, due to a higher base due to the relaxation of covid virus restrictions in the same period last year.

Not only Budweiser, but the growth rate of beer production in the whole industry in the second quarter of this year was lower than that in the same period last year.

From January to February last year, due to the limited consumption scenarios caused by the epidemic situation, the beer production of the whole industry dropped by 40% to only over 3 million kiloliters, and recovered to 5 million kiloliters in the same period of this year. After entering the second quarter of last year, consumers' retaliatory consumption rebounded sharply, and the monthly beer sales exceeded the abnormal value of 4 million kiloliters. However, in the second quarter of this year, it has returned to the normal level of previous years, and the beer production has dropped to more than 3 million kiloliters per month.

So, can China's beer sales return to the past?

According to the guidelines for the development of China's liquor industry during the "14th five year plan" issued by the China Liquor Association, China's beer sales will enter an era of slight increase. It is estimated that by 2025, the output of beer industry will reach 38 million kiloliters, an increase of 11.4% over the end of the 13th five year plan and an average annual increase of 2.2%.

The slight increase was first reflected in Zhujiang Beer. According to the performance forecast, Zhujiang Beer sold 620000 tons of beer in the first half of this year, an increase of 1.6% compared with 610000 tons in the first half of 2019. Sales rose instead of falling.

Despite the bottleneck of sales growth, the beer industry will make more and more money under the promotion of high-end.

According to the guidelines for the development of China's liquor industry during the 14th Five Year Plan period, it is estimated that by 2025, China's beer sales revenue will reach 240 billion yuan, an increase of 63% over the end of the 13th five year plan and an average annual growth of 10%; The total profit was 30 billion yuan, with a year-on-year increase of 124% and an average annual growth of 17.5%.

"China's beer market has risen from a single basic demand for products to a stage of coexistence with quality demands, and is entering a period of juxtaposition of basic product demands, quality demands and taste demands." In mid July, He Yong, Secretary General of China Liquor Industry Association and director general of beer branch, pointed out at the China Workshop beer development forum held in Qingdao that high-end is reflected in high quality and high price. If the high quality is not recognized by the market, it is impossible to talk about high price. In short, only products that consumers fear have a premium.