报告名称：Tsingtao Brewery (00168.HK)Earnings Growth Under Pressure but Healthy Free Cash
报告类型：港股研究
报告日期：2015-12-28
研究机构：国泰君安国际
页数：7
简介：Beer industry’s production volume in China fell by 5.7% during Jan.-Oct.2015, while revenue and profit before tax growth of beer manufacturers inChina for the same period were 2.4% and 7.6%, respectively. Tsingtao’ssales volume, revenue and core net profit growth in 1Q-3Q15 were-7.5%, -5.5% and -23.3%, respectively, which all underperformedindustry averages and major peers.
Tsingtao achieved reported net profit growth every year since 1997 but itsreported net profit decreased by 19.9% YoY in 1Q-3Q15. Tsingtao sold aparcel of land and is expected to book disposal gain of over RMB310 millionin 2015. However, Tsingtao in general records core net loss in 4Q and thus,we do not expect Tsingtao to deliver reported net profit growth in 2015. CRB(00291 HK) could buy back its 49% equity interests in Snow Beer fromABInbev and SABMiller and this would be a better scenario for Tsingtao.Due to weaker than expected sales volume, we cut previous core EPSforecast for 2015-2017 by 35.5%, 33.3% and 31.0%, respectively.
Beer consumption per capita in China is not low comparing to otherdeveloped countries in Asia. Despite weak earnings growth expectation,CAPEX is also expected to stay low and Tsingtao will continue to recordhealthy free cash inflow. Therefore, we still maintain “Neutral” on Tsingtaobut revise down TP to HK$36.30 on lowered earnings forecasts. The new TPrepresents 20.0x 2016 ex-cash PER.

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