Jiangsu Yanghe’s Growth Accelerated; Maintaining Our FVE of CNY 170 per Share

We maintain our fair value estimate of CNY 170 per share, following Jiangsu Yanghe Brewery's in-line 2021 core operating performance and robust first-quarter 2022 results, which revealed accelerating profit growth following efforts during the last few quarters to consolidate its distribution channels and sales team. We maintain our full-year 2022 recurring net profit forecast of CNY 9.4 billion, and we expect Yanghe’s recurring net profit to grow at a five-year CAGR of 12.8% through 2021-26, with expanding sales of the flagship premium product Dream M6+ the key growth driver. We think the shares are fairly valued currently.