Morningstar

Tsingtao Brewery Co Ltd Class A 600600

Morningstar Rating
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Stock XSHG Rating as of
¥78.35 +7.12 (10.00%)
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As of Delayed Price Closed

Company Report

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Tsingtao Brewery Earnings: Volume Growth Trailed Expectations: Cutting Fair Value by 6% to HKD 73

Jacky Tsang

Narrow-moat Tsingtao Brewery’s second-quarter results trailed our revenue and net profit estimates, primarily due to volume headwinds. On a positive note, gross profit per ton beat our expectations and grew 6% year on year, driven by lower input costs. Hence, net income only missed our estimates by 5% despite the 10% miss in revenue. We left our 2024 net income projection largely unchanged as volume weakness was offset by a better margin. However, we reduce 2025-28 earnings projections by 3%-4% due to lower volume growth assumptions.

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Price vs Fair Value

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600600 is trading within a range we consider fairly valued.
Price
¥78.35
Fair Value
¥29.00
Uncertainty
High
1-Star Price
¥141.20
5-Star Price
¥78.90
Economic Moat
Mzmwkxz
Capital Allocation
Frvwnqf

Bulls Say, Bears Say

Bulls

Tsingtao Brewery’s dominant market position and distribution strength in Shandong allow the company to maneuver on product mix.

Bears

Tsingtao lacks competitive international brands in its portfolio, which puts the company at a disadvantaged position against China Resources Beer, Budweiser APAC, and Chongqing Brewery in the premium segment.

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News

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Trading Information

Previous Close Price
¥71.23
Day Range
¥74.00–78.35
52-Week Range
¥53.20–89.44
Bid/Ask
¥78.34 / ¥78.35
Market Cap
¥106.88 Bil
Volume/Avg
22.5 Mil / 6.4 Mil

Key Statistics

Price/Earnings (Normalized)
26.59
Price/Sales
3.29
Dividend Yield (Trailing)
2.55%
Dividend Yield (Forward)
2.55%
Total Yield
2.55%

Company Profile

With over 100 years of history, Tsingtao Brewery has become one of the leading brewers in China with its namesake Tsingtao brand. The company has a dominant position in its core market, Shandong province, which contributed close to 60% of its revenue and net profit in 2023. Unlike other major brewers, Tsingtao Brewery’s brand umbrellas consist entirely of domestic brands. The Tsingtao brand has a mid-range to high-end market positioning and contributed over half of its volume whereas the mass market Laoshan brand targets the mainstream segment, with a declining volume mix as the company sought to premiumize its portfolio.
Sector
Consumer Defensive
Industry
Beverages - Brewers
Stock Style Box
Large Core
Total Number of Employees
30,687
Website
https://www.tsingtao.com

Competitors

Valuation

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Metric
600600
00291
HEIA
Price/Earnings (Normalized)
 26.5920.4116.45
Price/Book Value
 3.763.292.30
Price/Sales
 3.292.761.44
Price/Cash Flow
 23.4119.919.39
Price/Earnings
600600
00291
HEIA

Financial Strength

Metric
600600
00291
HEIA
Quick Ratio
 1.410.400.51
Current Ratio
 1.630.750.78
Interest Coverage
 235.1551.503.07
Quick Ratio
600600
00291
HEIA

Profitability

Metric
600600
00291
HEIA
Return on Assets (Normalized)
 7.62%6.98%4.84%
Return on Equity (Normalized)
 14.27%16.40%13.69%
Return on Invested Capital (Normalized)
 12.30%12.46%7.65%
Return on Assets
600600
00291
HEIA

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