Elevator Pitch
I assign a Neutral rating to Hong Kong-listed Chinese beer company Tsingtao Brewery Company Limited (TSGTF) (TSGTY) [168:HK].
Tsingtao Brewery suffered from market share losses and declining profitability in 2015-2017, prior to engineering a turnaround in the past two years. Looking ahead, the company's share incentive plan is a key motivating factor for its management team to drive Tsingtao Brewery's future earnings growth, with a +20% three-year earnings CAGR as the target.
On the flip side, Tsingtao trades at 43.0 times consensus forward next 12 months' P/E, which represents a premium to its