Equity Analysis /
China

CN : Tsingtao Brewery-A - Strong sales recovery of high-end products in FY21

    Lei Yang
    Lei Yang

    Research Analyst

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    CGS-CIMB
    30 March 2021
    Published byCGS-CIMB

    Tsingtao released its FY20 results, with revenue dropping slightly by 0.8% and net profit growing 18.9% yoy, in line with our expectations. With high-end consumption places such as restaurants and KTVs gradually re-opening, we believe the Company has the capability to recover its market position in these on-trade channels and that the sales contribution from these channels will recover to the previous level of 60% (2020: 45%). We expect Tsingtao’s sales to grow by 4.8% yoy and net profit to rise by 9.2% yoy in FY21F, driven by a gradual recovery in the catering channel and night clubs, which will boost sales of high-end products. Reiterate Add with an unchanged TP of Rmb108