CR BEVERAGE(2460.HK)：LEAVE THE WORST BEHIND IN 2025

Core Viewpoint - CR Beverage is expected to experience a significant decline in net profit for FY25E, with a forecasted drop of 35.5% to RMB1.06 billion, particularly in the second half of the year due to large marketing contracts and increased supply chain investments [1] Group 1: Market Performance - The packaged water market share is stabilizing, with internal data indicating a slight increase at the end of Q3 compared to Q2, consistent with third-party data trends [2] - The self-owned capacity ratio for FY2025E is projected to be over 60%, slightly above the target, but progress is slower than anticipated due to delays in factory ramp-up and production commencement [2] Group 2: Company Reforms and Management - The new Chairman, with extensive experience in finance, strategy, sales, and channels, is expected to implement significant reforms, starting with sales and then production [3] - There is a possibility of more positive incentives for frontline sales staff, which may enhance performance [3] - The company is considering increasing the dividend payout ratio in light of weaker performance in 2025 [3] Group 3: Future Outlook - 2025 is viewed as a year of pressure release, with expectations for better growth during the 15th Five-Year Plan period, with recovery anticipated as early as FY26E [1][3] - Channel reform is progressing, with the flattening of tiers in tier-1 cities expected to conclude by Q2 2026, and deployment in emerging channels largely completed by 2025 [2]