Core Viewpoint - Credit Lyonnais reports that China Resources Beer (00291) is expected to outperform the industry in beer sales growth in the first half of 2025, with a continued upward trend anticipated in the second half, despite the recovery of the liquor market taking time [1] Group 1: Sales and Profitability - The firm anticipates continued expansion of profit margins in the second half of 2025 [1] - The net profit forecast for 2025 has been raised by 7%, reflecting better gross margin trends and one-time land disposal gains [1] Group 2: Valuation and Ratings - Credit Lyonnais has increased the target price for China Resources Beer from HKD 30.4 to HKD 33.2, using a 9x 12-month forward EV/EBITDA for the beer business and a 10x P/E for the liquor business, with multiples remaining unchanged [1] - The firm maintains an "outperform" rating for the stock [1]

Group 1 - The core viewpoint of the report is that China Resources Beer (00291) has exceeded expectations in its first half performance, driven by sales growth in mid-to-high-end beer segments, which has led to an increase in average selling prices [1] - The company plans to continue focusing on Heineken as its core brand while also strengthening its mid-to-high-end market as another growth driver during the 14th Five-Year Plan [1] - The brokerage expects that the adjustment phase of the liquor business in the second half of the year will not worsen further, but any potential impairment will depend on business operations [1] Group 2 - The brokerage maintains a "Buy" rating for the company, with a target price adjusted from HKD 35 to HKD 33.8 to reflect the weakness in the liquor business [1]

Core Insights - China Resources Beer reported growth in revenue and profit for the first half of the year, with strong performance in its beer business, but a decline in its liquor business due to overall industry pressure [1][7]. Financial Performance - The company's total revenue for the first half of the year was 23.942 billion yuan, a year-on-year increase of 0.8% [2]. - Shareholder profit reached 5.789 billion yuan, reflecting a 23% increase year-on-year [2]. - The gross profit margin improved to 48.9%, up 2 percentage points from the previous year [2]. - Beer business revenue was 23.161 billion yuan, with a 2.6% year-on-year growth, and shareholder profit from beer increased by 17.3% [2]. - Beer product sales volume reached 6.487 million kiloliters, a 2.2% increase year-on-year [2]. - The average selling price of beer rose by 0.4% due to ongoing premiumization efforts [2]. Strategic Initiatives - The company has successfully implemented a premiumization strategy, with significant growth in high-end beer sales [3]. - Sales of premium and above beer products grew by over 10%, with Heineken and Snow beer brands showing strong performance [3]. - The company has developed various specialty beers to meet diverse consumer preferences [2]. Channel Development - Online and instant retail channels have seen rapid growth, with overall GMV increasing by nearly 40% and instant retail by 50% year-on-year [6]. - The company is exploring new business models, including customization and contract manufacturing [6]. Liquor Business Performance - The liquor business revenue fell to 781 million yuan, a decline of 33.7% year-on-year, with significant contributions from major products [7]. - The management anticipates a potential recovery in the liquor market, particularly during peak seasons [7]. - The company plans to introduce products in the 100 yuan price range to align with market demand [7].

报告期内，华润啤酒实现啤酒销量约648.7万千升，同比上升2.2%，高端啤酒产品持续发力，次高及以 上啤酒销量同比中至高单位数增长，普高档及以上啤酒销量同比增长超过10%。 其中，"喜力"在去年高基数的情况下销量仍突破两成增长，"老雪"销量同比增长超过70%，"红爵"销量 比去年同期实现翻倍增长。 销量高增传导至业绩端。截至6月末，华润啤酒的啤酒业务营业额同比增长2.6%，对应231.61亿元。同 时，高端化战略带动平均销售价格同比上升0.4%，以及原材料采购成本的节约推动啤酒业务毛利率同 比上升2.5个百分点至48.3%。 财报沟通会上，华润啤酒执行董事及总裁赵春武称，啤酒行业的高端化空间依旧巨大，将继续坚持高端 化作为首要战略。 近期，在白酒消费疲软的大环境下，五粮液、珍酒等白酒企业纷纷推出啤酒产品。对此赵春武表示，越 来越多的新"玩家"进入啤酒赛道说明这个行业仍然具有吸引力，竞争中各个企业能发挥所长。 带动业绩向上的依旧是啤酒业务。 禁酒令也是会上被提及的重点问题。 魏强称，当前公司在重塑摘要的价格体系，其中非常关键的一点就是终端零售价要随着市场行情波动， 保证终端出货和经销商的获利，这一点公司还在不断 ...

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation of total returns exceeding the relevant industry over the next 12 months [2][17]. Core Insights - The company reported better-than-expected performance in the first half of 2025, with revenue and net profit increasing by 0.8% and 23.0% year-on-year, reaching RMB 239.4 billion and RMB 57.9 billion respectively [6][15]. - The improvement in profitability is attributed to the upgrade of the beer business structure, the release of raw material cost benefits, and effective cost control under the "Three Precision" strategy [6]. - The target price for the company has been raised to HKD 35.90, reflecting a potential upside of 26.9% from the current price of HKD 28.28 [1][14]. Financial Performance Summary - Revenue projections for the company are as follows: RMB 38,932 million in 2023, RMB 38,635 million in 2024, and estimated growth to RMB 39,239 million in 2025, with a compound annual growth rate of 1.6% [5][15]. - Net profit is expected to increase from RMB 5,153 million in 2023 to RMB 5,807 million in 2025, reflecting a year-on-year growth of 22.5% [5][9]. - The beer business showed a revenue increase of 2.6% to RMB 231.6 billion, driven by sales volume growth of 2.2% and a slight price increase of 0.4% [6][8]. Business Segment Analysis - The beer segment's gross margin improved by 2.5 percentage points to 48.3%, while the adjusted EBITDA margin increased by 3.4 percentage points to 35.1% [6][8]. - The white liquor segment faced challenges, with a significant revenue decline of 33.7% to RMB 7.8 billion, attributed to ongoing difficulties in the business banquet scene [6][8]. - The company plans to focus on developing mass-market and light bottle liquor products to reshape its pricing structure and expand coverage in the mid-to-low-end liquor market [6]. Earnings Forecast Adjustments - The earnings forecasts for 2025-2027 have been slightly adjusted, with revenue estimates reduced by 1-5%, while EBITDA and net profit margins are expected to improve by 0.9-1.8 and 0-1.5 percentage points respectively [6][9].

Summary of China Resources Beer (0291.HK) Earnings Review Company Overview - **Company**: China Resources Beer (0291.HK) - **Market Cap**: HK$91.7 billion / $11.7 billion - **Enterprise Value**: HK$90.3 billion / $11.6 billion - **Current Price**: HK$28.28 - **Target Price**: HK$37.00 - **Upside Potential**: 30.8% [1][3] Key Financial Highlights - **1H25 Results**: Better-than-expected core EBIT driven by cost tailwinds and operational efficiency - **Revenue Forecasts**: - 2025E: Rmb39,222.3 million - 2026E: Rmb40,255.4 million - 2027E: Rmb40,940.2 million [3][12] - **EBITDA Growth**: - 2025E: Rmb10,309.9 million - 2026E: Rmb10,599.3 million - 2027E: Rmb11,128.0 million [3][12] - **EPS Growth**: - 2025E: Rmb1.70 - 2026E: Rmb1.90 - 2027E: Rmb2.05 [3][12] Strategic Insights - **Market Conditions**: The macro situation remains fluid with deflation risks, but the company is optimistic about its execution in premiumization and market share gains - **Beer Segment**: Expected mild acceleration in 2H25 with normalizing policy impacts; management emphasizes Heineken as a key driver for premiumization [1][14] - **Spirits Segment**: Potential overhang into 2H25; management plans to expand mid-range products and enhance channel profitability [1][14] Management Strategies 1. **Policy Normalization**: Signs of normalizing anti-extravagance policy observed in August, with improved run-rates for both beer and spirits [1][14] 2. **Premiumization Focus**: Continued prioritization of Heineken and enhancement of brand equity to drive high-quality growth [1][14] 3. **New Channels Growth**: Rapid growth in new channels (instant delivery, Sam's Club) expected to drive volume and mix with minimal margin challenges [1][14] 4. **Cost Control**: Focus on margin improvement and efficiency gains, including streamlining factories and reducing headcount [1][14] Financial Projections and Changes - **Recurring EPS Forecast**: Revised up by 5-6% for 2025-2027E due to improved beer sales estimates and better gross profit margin outlook [1][15] - **Sales Growth**: Expected 3.2% sales growth and 11.9% recurring EBIT growth in 2025E [1][15] - **Free Cash Flow**: Projected at Rmb5.7 billion in 1H25, with a net cash position of Rmb7 billion [1][14] Valuation Metrics - **P/E Ratios**: - 2025E: 15.2x - 2026E: 13.6x - 2027E: 12.6x [3][8] - **Dividend Yield**: Expected to increase from 2.8% in 2024 to 5.1% in 2027 [3][8] Conclusion - **Investment Recommendation**: The company maintains a "Buy" rating with a target price of HK$37.00, reflecting strong execution in premiumization and operational efficiency despite macroeconomic challenges [1][15]

Investment Rating - The report maintains a "Buy" rating for China Resources Beer (291.HK) with a target price of HKD 34.3, indicating a potential upside of 21.3% from the current price of HKD 28.3 [1][3]. Core Insights - China Resources Beer reported a 23% year-on-year increase in net profit attributable to shareholders for 1H25, reaching RMB 5.79 billion. The core operating profit, adjusted for one-time items, grew by 11.3% to RMB 7.1 billion, surpassing market expectations due to a significant reduction in unit costs and improved gross margins [1][5]. - The company is one of the few in the beer industry that achieved positive growth in average selling prices during a weak consumption environment, with a 0.4% increase in 1H25 [1][5]. - The new management's clear business development plans and positive outlook are expected to enhance market confidence in the company's future performance, potentially leading to better stock performance compared to peers [1][5]. Financial Performance Summary - **Sales Volume and Pricing**: In 1H25, beer sales volume increased by 2.2%, outperforming major competitors like Budweiser APAC, which saw an 8.2% decline. The average selling price rose by 0.4% due to a shift towards higher-end products, with premium and above products seeing over 10% growth [5][10]. - **Cost Management**: The unit cost decreased by 4.1% year-on-year, contributing to a 2.5 percentage point expansion in gross margin. The company's "Three Precision" strategy led to an 11% reduction in overall sales expenses [5][10]. - **White Spirit Business**: Despite a 34% drop in revenue from the white spirit segment due to regulatory challenges, the impact on overall performance is limited as this segment contributes a small portion to total revenue [5][10]. Financial Projections - **Revenue and Profit Forecasts**: The projected revenue for 2025 is RMB 39.13 billion, with a year-on-year growth of 1.3%. The net profit attributable to shareholders is expected to reach RMB 6.09 billion, reflecting a 28.5% increase [7][10]. - **Valuation Metrics**: The report provides a price-to-earnings (P/E) ratio forecast of 14.0 for 2025, with a return on equity (ROE) projected at 19.1% [7][10]. Market Positioning - The company is positioned to capture market share from competitors in the high-end segment, with significant growth opportunities in regions where its premium products are currently underrepresented [5][10].

Group 1: Financial Performance - In the first half of 2025, China Resources Beer (控股) Limited reported revenue of 23.942 billion yuan, a year-on-year increase of 0.8% [1] - The gross profit margin rose by 2 percentage points to 48.9% due to the high-end beer strategy and cost savings in raw material procurement [1] - Shareholder profit attributable to the company was 5.789 billion yuan, reflecting a year-on-year growth of 23% [1] Group 2: Beer Business - The beer segment achieved an unaudited revenue of 23.161 billion yuan, up 2.6% year-on-year, with sales volume reaching approximately 6.487 million kiloliters, an increase of 2.2% [1] - High-end beer products saw significant growth, with sales of premium and above beer increasing by over 10% year-on-year; "Heineken" sales grew by over 20%, while "Snow" beer sales surged by over 70% [1] Group 3: White Spirit Business - The white spirit segment reported an unaudited revenue of 0.781 billion yuan, down from 1.178 billion yuan in the same period last year, with the major product "Abstract" contributing nearly 80% of the revenue [2] - The white spirit industry is undergoing a deep adjustment, and future improvements depend on the performance during the peak seasons of Mid-Autumn and Spring Festival [2] Group 4: Management and Strategy - Following the departure of former chairman Hou Xiaohai, the current management led by Zhao Chunwu aims to continue the existing strategic direction without major changes [3] - The company is focusing on developing online business channels, which have seen significant growth, with overall GMV increasing by nearly 40% and instant retail business by nearly 50% year-on-year [3] - The company is exploring new business models, including customization and contract manufacturing, and sees instant retail as a crucial channel for future growth and consumer engagement [3] Group 5: Market Trends - Competitors like Yanjing Beer and Chongqing Beer are diversifying into beverage products to meet consumer demands across various consumption scenarios [4]

Core Viewpoint - Morgan Stanley has raised its net profit forecast for China Resources Beer (00291) by 10% for 2025 due to a one-time gain from land sales to joint ventures in the first half of the year, while maintaining an "Overweight" rating and increasing the target price from HKD 34 to HKD 35 [1] Group 1: Financial Performance - The EBIT of China Resources Beer recorded a 14% growth in the first half of the year, outperforming peers despite a challenging industry environment [1] - The recurring profit forecasts for 2025 to 2027 have been adjusted upwards by 1% to 2% [1] Group 2: Strategic Outlook - The company is expected to continue its profit growth through a high-end strategy and enhanced penetration in non-immediate consumption channels, alongside ongoing improvements in profit margins [1] - Management has indicated a commitment to advancing the high-end strategy, leveraging core brands such as Heineken and Snow Beer, as well as other premium and sub-premium brands to increase market share [1]

Core Viewpoint - China Resources Beer Holdings Company Limited (CR Beer) reported strong revenue and net profit growth in its 2025 interim results, showcasing the success of its "3+3+3" nine-year strategy despite a slight decline in the overall beer industry [1][2]. Financial Performance - In the first half of 2025, CR Beer achieved revenue of 23.94 billion yuan, a year-on-year increase of 0.8% [2] - The profit attributable to shareholders was 5.789 billion yuan, up 23% year-on-year [2] - The company's EBITDA was 7.691 billion yuan, reflecting a 20.8% increase [2] - The gross profit margin improved to 48.9%, an increase of 2 percentage points compared to the previous year [2] - The board declared an interim dividend of 0.464 yuan per share, a 24.4% increase from the same period last year [2] Beer Business Performance - CR Beer sold approximately 6.487 million kiloliters of beer in the first half of 2025, a 2.2% increase year-on-year [2] - The beer business generated an unaudited revenue of 23.161 billion yuan, up 2.6% year-on-year [2] - The average selling price of beer increased by 0.4% due to ongoing premiumization efforts [2] - The gross profit margin for the beer business rose by 2.5 percentage points to 48.3% [2] - Premium beer products saw sales growth of over 10% year-on-year, with brands like "Heineken" and "Snow" achieving significant increases [2] Strategic Focus - The company is committed to a high-end development strategy, which has been a key driver of its performance amid a challenging market environment [3][4] - The management team expressed confidence in continuing the established strategies, including the focus on high-end products and growth as the primary strategy [4] - The company plans to adapt to market changes while maintaining strategic consistency [4] White Wine Business Challenges - The white wine segment faced significant challenges due to industry adjustments and policy impacts, with revenue of 781 million yuan and EBITDA of 218 million yuan reported [2][5] - The company is adjusting its product structure to address market changes, including launching new products at competitive price points [5] Market Position and Future Outlook - CR Beer is recognized for its dual-brand strategy in both beer and white wine, which is expected to enhance its market position [6] - Analysts predict that the company's focus on premiumization and cost advantages will continue to yield positive results [7] - The stock price of CR Beer increased by 6.24% following the release of the interim report, closing at 28.28 HKD per share [6]