青岛啤酒：三季度表现疲软，产品组合恶化部分被成本结构优化抵消

Euan McLeish+81 3 5962 9611euan.mcleish@bernsteinsg.com Tsingtao Brewery Co Ltd Hao Wang, CFA+852 2123 2627hao.wang@bernsteinsg.com RatingOutperform Mufei Gao+81 3 6777 6995mufei.gao@bernsteinsg.com Price Target Tsingtao: A weak Q3 with deteriorating mix somewhat saved bythe cost structure Tsingtao posted flat revenue, 9% EBIT growth and 1.6% EPS growth in Q3, missing ourbottom line estimate by 4% and BBG consensus by 6% for the quarter. Volumes and mixwere disappointing, despite the soft comp, but upside from moderating COGS/hl and SellingExpenses partially offset the revenue miss (-3% vs Bern) and brought EBIT in only 1.8% belowour est. The combination of materially tougher Q4 top line comps, and a late CNY, point to aweak end to FY25 for Tsingtao. Q3 volume growth slowed to 0.3% YoY, from 3.5% in Q1 and 1.0% in Q2. The slowdown wasmainly driven by declining low-end volumes in the quarter (-4% yoy, Exhibit 2). Price /mix wasdisappointing in Q3 (-0.5%) after having been a meaningful positive driver in both Q2 into Q3,and the fact that Low-End volumes were down 4% suggests that the 7% mid-to-high endvolume growth was driven by the mid-end while Premium under performed. Raw material price tailwinds accelerated in the quarter (-3% YoY), however, and this led to ac. 150bps of Gross Margin expansion in Q3. Selling expenses were down from 15.2% of NetRevenue to 14.8% in 3Q, coming in 6% below our estimate in absolute, and Admin was up inproportion to revenue. Government grants were down 6.6%. We view the company’s termination of their planed Huangjiu acquisition as a net positivegiven the lack of apparent synergy or industrial logic. Investment Implications We maintain ourTsingtao H-share OutperformandA-Share Market-Perform ratings,withPTs as HK$68/RMB63(168.HK). DETAILS Tsingtao Volume Growth by Brand and Segment (YoY %) APPENDIX - FINANCIAL FORECASTS BERNSTEIN TICKER TABLE I. REQUIRED DISCLOSURES References to "Bernstein" or the “Firm” in these disclosures relate to the following entities: Bernstein Institutional Services LLC(April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024 onwards), Sanford C. Bernstein (Hong Kong) Limited盛博香港有限公司,Sanford C. Bernstein (Canada) Limited, SanfordC. Bernstein (India) Private Limited (SEBI registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited andSanford C. Bernstein Japan KK(サンフォード・C・バーンスタイン株式会社). On April 1, 2024, Société Générale (SG) and AllianceBernstein, L.P. (AB) completed a transaction that created a new joint venturein which their respective cash equities and research businesses operate in a new business combination. Although their respectiveownership percentages in the joint venture differ between North America and the rest of the world, the creation, production andpublication of research is handled collaboratively on a global basis across the two research brands, “Bernstein” and “Autonomous”.Unless specifically noted otherwise, for purposes of these disclosures, references to Bernstein’s “affiliates” relate to both SG andAB and their respective affiliates. Tsingtao Brewery Co Ltd We set a HK$68/CNY63 price target for Tsingtao H/A-share using a P/E multiple of 17.0x against our forward NTM+1 EPSestimate of CNY3.7, which implies an NTM EV/EBITDA multiple of 9.0x based on our forward NTM+1 EBITDA estimate ofCNY7.3b. RISKS Tsingtao Brewery Co Ltd Potential upside risks to our Price Target for Tsingtao: •Management change leads to increased focus on profit maximisation•Major M&A creating a clear market leader with a scale advantage that leads to higher margins than anticipated•Higher economic growth could lead to increased consumption expenditure growth and higher than projected consumptiongrowth•The impact of increasing disposable incomes could have a higher impact on consumption than we expect. Potential downside risks to our Price Target for Tsingtao: •Delay in brewery closure schedule•Slower pace of premiumization delivered•Potential regulatory risk on beer consumption. RATINGS DEFINITIONS, BENCHMARKS AND DISTRIBUTION EQUITY RATINGS DEFINITIONS Bernstein brand The Bernstein brand rates stocks based on forecasts of relative performance for the next 12 months versus the S&P 500 forstocks listed on the U.S. and Canadian exchanges, versus the Bloomberg Europe Developed Markets Large and Mid Cap PriceReturn Index (EDM) for stocks listed on the European exchanges and emerging markets exchanges outside of the Asia Pacificregion, versus the Bloomberg Japan Large and Mid Cap Price Return Index USD (JP) for stocks listed on the Japanese exchanges,and versus the Bloomberg Asia ex-Japan Large and Mid Cap Price Return Index (ASIAX) for stocks listed on the Asian (ex-Japan)exchanges -unless otherwise specified. The Bernstein brand has three categories of ratings: •Outperform: Stock will outpace the market index by more than 15 pp •Market-Perfo