中國啤酒業(yè)：國內(nèi)品牌正在進(jìn)行高端化

1、GlobalResearch15 April 2019China Beer SectorUBSEvidenceLabinside:domesticbrands premiumisationunderwayPositive implications for domestic Chinese breweriesThe 2018 UBS Evidence Lab China alcoholic beverages survey of 1,891 regular consumersintier1-4citiessuggestsapositiveoutlookfordomesticChinesebrew

2、eries revenue and margins, given: 1) a narrower gap in premium perception with international brands; and 2) their continued dominance in off-premises channels and stabilisation in the channel shift to on-premises consumption. The survey results also point to a solid demand outlook in the next 12 mon

3、ths. This should support acceeratg remmata tred evet n te ASP creaes ad marin expansionin HYPERLINK /shared/d2Fdp6IrW4Bvzf TsingtaoBrewerys(TB)and HYPERLINK /shared/d29eUPWeSpA7i ChinaResourcesBeers(CRB)2018results. WeremainpositiveontheChinabeersector,andcontinuetobelievecostsavingsfrom assetration

4、alisationatTBandCRBcoulddriveearningsupsidepotentialforboth.TB, CRB and Yanjing Brewery (YJ) are trading at 10 x, 12x and 9x 2020E EV/EBITDA, respectively,with2018-20EEBITDACAGRsof14%,24%and15%.Theinternational peer average is 15x with an 8% CAGR.Domestic brands narrowing the gap in premium percepti

5、onHeinekenrankedhighest/secondhighestinconsumersperceptionofquality/premium status among seven major brands, per the UBS Evidence Lab survey, supporting our viewthat HYPERLINK /shared/d2uyxe0vnTPniB2 theHeinekenChinaacquisitioncouldhelpdriveacceleratedpremiumisation HYPERLINK /shared/d2uyxe0vnTPniB2

6、 for CRB. Tsingtao Beer and CRB Snow still lagged behind Carlsberg, Heineken and Budweiserinpremiumperception,thoughthediscrepancieshavenarrowedYoY.TB and CRB maintained significant channel coverageTsingtaoBeerandCRBSnowmaintainedleadershipinconsumptionfrequencyinoff- premises channels, and ranked f

7、irst and third, respectively, in on-premises channels. TheirYoYsharedeclinesinconsumptionfrequencycouldbeduetoremovaloflow-end products amid a focus on high quality growth, in our view. Among major brands, Anheuser-BuschInBevs(ABI)Harbinnotablygainedconsumptionfrequencysharein the 2018 survey.Stock

8、implications: maintain Buy ratings on TB and CRB, Neutral on YJTBandCRBareourtoppicksintheChinabeersector,givenacceleratingmixupgrade andassetrationalisation.WeremainNeutralonYJduetoitsweakbrandperception.Figure 1: YoY changes in key metricsDistillers & BrewersChinaEquitiesChristine Peng,CFADistille

9、rs & BrewersChinaEquities HYPERLINK mailto:christine-y.peng +852-29717571NikOliver,ACA HYPERLINK mailto:nik.oliver +44-20-75684982BradChen HYPERLINK mailto:brad-a.chen +86-213-8668985Ting Wang,CFA HYPERLINK mailto:ting-za.wang118 vs. H117CRB H218H2172018 vs.2017Q118 vs. Q117Q218 vs

10、. Q217TB Q318 Q317Q418 vs. Q4172018 vs.2017Q118 vs. Q117ABI (China business)Q218 vs. Q318 vs. Q418vs. Q217Q3172018 vs.2017Revenue11%2%7%3%7%6%4%5%4%7%7%17%8%GPM+250bps+10bps+140bps-50bps+110bps-160bps+200bps+0bpsOP47%-21%20%8%5%14%NM12%11%6%23%NA21%OPM+340bps-180bps+110bps+60bps-10bps+80bps+40bps+40

11、bps+200bps-20bps+415bpsNA+338bpsBeer ASP13%11%12%2%6%5%3%4%3%4%6%10%6%Note:TBadjustedforaccountingstandardchanges;forABI,wepresentEBITDAinsteadofEBITdata. Source: Company data, UBSestimates HYPERLINK /investmentresearch /investmentresearchThisreporthasbeenpreparedbyUBSSecuritiesAsiaLimited. ANALYSTC

12、ERTIFICATIONANDREQUIREDDISCLOSURESBEGIN ONPAGE33. UBSdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbe aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a sing

13、le factor in making their investment decision.ContentsOURTHESISINPICTURES4PIVOTALQUESTIONS6 HYPERLINK l _TOC_250001 Q:WilltherebeupgradingopportunitiesfordomesticChinesebrandsinthe next1-2years? HYPERLINK l _TOC_250000 WHATSPRICEDIN?28Christine Peng,CFA HYPERLINK mailto:christine-y.peng +852-2971757

14、1NikOliver,ACA HYPERLINK mailto:nik.oliver +44-20-75684982BradChen HYPERLINK mailto:brad-a.chen +86-213-8668985Ting Wang,CFA HYPERLINK mailto:ting-za.wanghina Beer SectorUBS Research THESIS MAP a guide to our thinking and whats where in this report HYPERLINK l _bookmark1 OURTHESISI

15、NPICTURESMOSTFAVOREDLEAST FAVOREDTsingtao Brewery, China Resources Beer Yanjing BreweryPIVOTALQUESTIONSQ:Willtherebeindustry-widepricehikesoverthenextonetotwoyears?Unlikely. After the industry-wide price hikes since December 2017 due to supply discipline, rising costpressuresandademandrecovery,wethi

16、nkfuturepricehikesarelesslikelygiventhepotential cooling of the economy and continued lacklustre beer volume consumptiongrowth. HYPERLINK /shared/d2qDQd50GlaSO0b US ve a: Ca eer Sctr-rst yar f ve ecery n ; wats xt 7Q: Will there be upgrading opportunities for Chinese brands in the next 1-2 years?Yes

17、,givenpositivedemandtrendsandtheoutlookfortheChinabeermarketsuggestedbytheUBS Evidence Lab survey, as well as domestic Chinese brands wide channel coverage, strong brand awareness,andqualityperceptionamongconsumers.Astabilisationinchannelshifttoon-premises beer consumption would also help, in our vi

18、ew, due to domestic brands strong presence in off- premises channels. In addition, Heinekens premium status and high quality in the eyes of consumersshouldhelpdriveCRBspremiumisation,inourview. HYPERLINK l _bookmark2 Q: Will the three Chinese breweries factory closures accelerate over the next 1-2 y

19、ears? Yes,givenlacklustrevolumegrowth.CRBsfactoryclosuresacceleratedin2018.TBannouncedthe closureoftwofactoriesin2018andtargets10closuresinthenextfiveyears.Wecollaboratedwiththe UBS Quant team to work out 36% EBITDA improvements in total for the top four nationalbreweries by closing 20-30% of factor

20、ies. HYPERLINK /shared/d2qDQd50GlaSO0b US vnce a: Ca eer Sctr-rst yar f ve ecery n ; wats xt 7UBSVIEWWearepositiveontheChinabeersectorinviewofthehealthydemandtrendsandoutlookrevealed by UBS Evidence Lab survey results, and accelerating premiumisation supported by domestic brands widechannelcoverage,

21、brandawarenessandqualityperceptionamongconsumers.Wecontinueto believecostsavingsfromassetrationalisationcoulddriveearningsupsidepotentialforTBandCRB.EVIDENCE1)UBSEvidenceLabsurveyresultsshowincreasedspendingandvolumeconsumptioninbeerover thepast12months,andasolidspendingoutlookforthenext12months;2)t

22、heaverageunitprice paid for regular beer brands at home/outside of home rose 16%/12% in the 2018 survey, with unit price paid shifting to higher price bands, indicating a premiumisation trend; 3) Tsingtao Beer and CRBSnowappeartohavethehighestbrandawareness.Tsingtaoisthemostoftenconsumedbrand in bot

23、h on- and off-premises channels, while Snow ranks third and second; 4) Carlsberg and Heinekenareconsideredthemostpremiumbrandsbyregularconsumers,whileHeinekenranked highest in quality perception; 5) the shift in beer consumption towards on-premises channels has stabilised in recent years.WHATSPRICED

24、IN?CRB/TB/YJ are trading at 12x/10 x/9x 2020E EV/EBITDA with 2018-20E EBITDA CAGRs of 24%/14%/15%, versus the international peer average of 15x and an 8% CAGR. We believe the markethasnotfullyfactoredinthebenefitsfromCRBandTBsassetrationalisation. HYPERLINK l _bookmark3 100%Beer volume consumption v

25、s. 12 months ago, 2018Tier 1 Tier 2 Tier 3 Tier 4 Low Medium High 18-29 30-39 40-54TotalTier 1 Tier 2 Tier 3 Tier 4 Low Medium High 18-29 30-39 40-54TotalTierMonthly Household IncomeAgeJuststartedMoreUnchangedLessFrequency of drinking beer for those who drink mostly beer among alcoholic beverages (n

26、o. of times per week)Despite the positive consumption trend revealed by the survey, beer volume industry-wide has generally been soft in the past year. This could be partly due to lower drinking frequency among heavy drinkers.0.020182017100%Monthly spend on beer vs. 12 months ago, 2018Tier 1 Tier 2

27、Tier 3 Tier 4 Low Medium High 18-29 30-39 40-54Among regular beer consumers, 42% indicated their current monthly spending on beer is higher than 12 months ago, again led by tier 2-3 city residents, high- income earners, and the 18-29 age group, while 5% are spending less.TotalTierMonthly IncomeMore

28、Unchanged LessAgeAverage price paid for regular beer brand drink at home vs. outside of home (Rmb per bottle/can)1614121086420The average unit price respondents paid for the regular brand they drink at home/outside of home rose 16%/12% from the 2017 survey, indicating a premiumisation trend, in our

29、view.Averagepricepaidforregularbeerbrand drink at homeAverage price paid for regular beer brand drink outside of home2018 201735%Brand consumed most often at home 7 major brands30%25%20%15%10%Domestic Chinese brands continued to lead international brands in terms of consumption frequency in off- pre

30、mises channels in the 2018 survey.5%0%SnowBudweiser20182017YanjingCarlsberg Heineken35%30%25%20%15%10%5%0%Brandconsumedmostoftenoutsideofhome7major brandsTsingtao BudweiserSnowHarbinCarlsberg Yanjing Heineken 2018 2017In on-premises channels, Budweiser advanced one position to become the second most

31、-often-consumed brand in 2018. Snows and Tsingtaos share losses in both on- and off-premises channels could be due to removals of low-end products amid a focus on high- quality growth, in our view.53%Beer consumption volume mix by channel in China: off- premises vs. on-premises52%51%50%49%The shift

32、in beer consumption towards on-premises channels in China has stabilised in recent years.48%200320042005200620072008200920102011201220132014201520162017201847%2003200420052006200720082009201020112012201320142015201620172018Off-premisesOn-premises12-month forward EV/EBITDA2520CRB is trading 0.4 stand

33、ard deviations above its 12-15month forward EV/EBITDA average since 2015; TBis10trading 0.4 standard deviations below its12-monthforward EV/EBITDA average since 2008; YJ is trading 0.45standard deviations below its 12-monthforwardEV/EBITDA average since 2012.Jan-08 Jun-08Jan-08 Jun-08 Nov-08 Apr-09

34、Sep-09 Feb-10 Jul-10 Dec-10 May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 Nov-13 Apr-14 Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Jun-18 Nov-18CRBTBYJSources: Euromonitor, UBS Evidence Lab, UBS estimatesPIVOTALQUESTIONS HYPERLINK l _bookmark0 return Q: Will there be upgrading opport

35、unities for domestic Chinese brands in the next 1-2years?UBS VIEWYes,giventhepositivedemandtrendsandoutlookfortheChinabeermarket assuggestedbytheUBSEvidenceLabsurvey,aswellasdomesticChinese brands wide channel coverage, strong brand awareness, and quality perceptionamongconsumers.Thestabilisationinc

36、hannelshifttoon-premises consumption could also help, in our view, due to domestic brands strong presenceinoff-premiseschannels.Inaddition,Heinekenspremiumstatusand highqualityintheeyesofconsumersshouldhelpdriveCRBspremiumisation, in our view.EVIDENCEUBS Evidence Lab survey results show increased sp

37、ending and volume consumption in beer during the past 12 months, and a solid spending outlook in the next 12 months.The average unit price respondents paid for the regular beer brand they drinkathome/outsideofhomewasup16%/12%versusthe2017survey in the 2018 survey, with unit price paid shifting to hi

38、gher price bands, indicating a premiumisation trend.Tsingtao Beer and CRB Snow appear to have the highest brand awareness. Tsingtao is the most often consumed brand in both on- and off-premiseschannels,whileSnowranksthirdandsecond.Tsingtaoand Snow lost some share YoY in terms of most-often-consumed

39、brand, which could be attributed to removals of low-end products amid a focus on high quality growth, in our view.ABIs Budweiser has the highest penetration in tier 1 city on-premises channels,whichcouldbetheprimaryreasonforitsleadingmarketshare in the premium segment, despite its lower premium posi

40、tioning than Heineken and Carlsberg. Heineken ranked highest in quality perception among regular consumers.Theshiftinbeerconsumptiontowardson-premiseschannelshasstabilised in recent years.WHATS PRICED IN?We believe investors could have underestimated potential share gains by domestic beer brands in

41、the premium segment, due to their weak premium brand positioning.UBS Evidence Lab survey results show positive trends in beer demandThe November-December 2018 UBS Evidence Lab survey of 1,891 regular alcoholic beverages consumers (defined as those who drink alcoholic beverages at least onceeverymont

42、h)fromtier1-4citiesinChinashowedpositivedemandtrendsfor beer in the past 12 months, as well as a solid demandoutlook.Amongregularbeerconsumers,43%indicatedtheywerenowdrinkingmorebeer than12monthsago,especiallytier2-3cityresidents,high-incomeearnersandthe 18-29 age groupwhile only 6% were drinking le

43、ss. Spending was also higher: 42% of regular beer consumers indicated their current monthly spending onbeer was higher than 12 months ago, again led by tier 2-3 city residents, high-income earners,andthe18-29agegroup,while5%werespendinglessnow.Figure 2: Beer volume consumption vs. 12 months ago, 201

44、8Figure 3: Monthly spend on beer vs. 12 months ago, 2018Tier 1 Tier 2 Tier 3 Tier 4 Low Medium High 18-29 30-39 40-54TotalTier 1 Tier 2 Tier 3 Tier 4 Low Medium High 18-29 30-39 40-54TotalTierMonthly Household IncomeAge0%Tier 1 Tier 2 Tier 3 Tier 4 Low Medium High 18-29 30-39 40-54TotalTier 1 Tier 2

45、 Tier 3 Tier 4 Low Medium High 18-29 30-39 40-54TotalTierMonthly Household IncomeAge0%JuststartedMoreUnchangedLessSource: UBSEvidenceLabSource:UBSEvidenceLabMoreUnchangedLessConsumersbeervolumeconsumptionisinfluencedbyotherpeopleschoices,the increasednumberofbrandsandvarieties,andincomelevels.Spendi

46、ngonbeeris influenced by income levels, other peoples choices, and higher frequency of visiting bars/restaurants.Despite the positive consumption trend revealed by the survey, beer volume industry-widehasgenerallybeensoftoverthepastyear.Webelievethiscouldbe partly due to heavy drinkers reporting a l

47、ower drinking frequency (please refer to the next section for details).Figure 4: Reasons for drinking more beer0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%Family/friendsdrinkmoreMore brands / varietiesavailableHigher income Goouttobars/restaurantsmoreoftenThebrandsdrinkbecomemorewidelyavailableLiketobe

48、seendrinkingthisThebrandsdrinkbecomemoreaffordable Thereareequallygoodbutmoreaffordablebrands20182017Note:Factorsarrangedindescendingorderofimportancein2018 Source: UBS EvidenceLab0%10%20%30%40%50%Higher income Family/friendsdrinkmoreDrinkmore(volume)ingeneralGoouttobars/restaurantsmoreoften Drinkmo

49、rebrands/varieties/flavoursMore brands / varietiesavailableDrinkmorewith/giftmoreonbusinessassociates togetmorebusinessinaweakereconomyDrinkmoreimported/premiumbrands PricesincreasedbutIstilllikemybrand LiketobeseendrinkingthisDrink less otheralcoholicbeverages Pricesincreasedandthereisnosubstituteb

50、rand20182017Note:Factorsarrangedindescendingorderofimportancein2018;drinkmorewith/giftmoreonbusiness associatestogetmorebusinessinaweakereconomywasaddedinthe2018surveySource: UBS Evidence LabAcross the seven major brands (Snow, Tsingtao, Yanjing, Budweiser, Harbin, Carlsberg,andHeineken),asignifican

51、tlyhigherproportionofregularbuyershave beenconsumingmoreinthepast12monthsthantheproportionofregularbuyers whoareconsumingless,withCarlsberghavingthelargestimprovement.Figure 6: Consumption change by brand in the past 12 months, 2018100%0%SnowTsingtaoYanjing Budweiser Harbin Carlsberg HeinekenA lot l

52、ess AlittlelessUnchanged A little more A lot moreSource: UBS Evidence Labas well as solid spending outlook for beerWe used data from the UBS Evidence Lab Data Science team to analyse consumptionshifttrendswithinthebroadalcoholicbeveragemarketinChina.We segmented survey respondents into five groups b

53、ased on how often they drink beer,wine,andotheralcoholicdrinks(namely,liquorsincludingbaijiu,whisky,and cognac),andaskedeachgroup:1)howcurrentspendingoneachtypeofalcoholic drink had changed from 12 months ago; and 2) how they expect their spending on each type of alcoholic drink to change in the nex

54、t 12months.GroupSizeShare percentageDrink mostly beer27714.7%Drink various alcoholic beverages, mostly wine23512.4%Drink mostly beer and liquor1568.2%Drink mostly liquor23912.6%Drink alcoholic beverages less often than once a week98552.1%Source: UBS Evidence LabFigure 8: Alcohol beverage consumer se

55、gmentation by frequency of drinking each type of alcohol, 2018Source: UBS Evidence LabSource: UBS Evidence LabOur key findings include:In addition to spending more on beer, people who drink mostly beer, also indicatedtheywerespendingmoreonliquorandwinethan12monthsago.They expect shifts in spending t

56、o be skewed towards beer, followed by cognac and wine in the next 12 months. However, the average frequency of drinking beer in this segment declined to 3 times per week in the 2018 survey from 3.3 times in the 2017 survey, which we believe could partly explain the industry volume softness,despiteth

57、epositivedemandtrendshownintheUBSEvidenceLabsurvey.Respondents who drink various alcoholic beverages and mostly wine increased their spending on wine, whisky, and beer the most in the past 12 months.Theyexpecttospendmoreonthesamethreecategoriesoverthenext12 months.increasedthemostfromayearago,follow

58、edbycognacandbaijiu.Theyexpectto increasetheirspendingprimarilyonbeer,followedbywineandbaijiu.Those who drink mostly liquor stated that their spending on baijiu and cognac rose the most in the past 12 months, and they expect future spending to be predominantly skewed towards baijiu, followed by wine

59、.For those who drink alcoholic beverages less often than once a week, the shift was mainly towards wine, followed by beer.Figure 10: Alcohol consumption shift, 2018Source: UBS Evidence LabAttitudes towards beverages revealed increased consumer willingness to experiment with new brands in the 2018 su

60、rvey, and a stronger perception that heritage brands offer better quality.Figure 11: Attitude towards beer100%20182017I experiment with new brands20182017I believe heritage brands offer betterquality20182017I experiment with new brands20182017I believe heritage brands offer betterqualitythannewerbra