2024-06-20 03:01Investment Rating - The report assigns a "Buy" rating to China Resources Beer (291.HK) with a target price of HKD 43.2, indicating a potential upside of 47.9% from the current price of HKD 29.2 [9][18]. Core Insights - The stock price of China Resources Beer has declined approximately 25% over the past 40 days due to weak market sentiment, primarily driven by concerns over soft restaurant channels and adverse weather conditions affecting beer sales. However, the company's sales have remained resilient, and management maintains an optimistic outlook for the year [8]. - The report anticipates a significant rebound in the stock price within the next 30 days as market sentiment improves with the onset of the peak season and favorable weather conditions [8]. - Despite a challenging consumption environment, the company is expected to outperform major competitors in terms of sales performance in the first half of 2024 [8]. - The report projects a stable profit growth for the year, with a forecasted 20%-30% sales growth for Heineken products and a slight decrease in unit costs due to locked prices for raw materials [8]. - The impact of industry demand changes on the company's liquor business is expected to be limited, as it is still in the early stages of development with significant growth potential [8]. Financial Projections - Revenue is projected to grow from RMB 35,263 million in 2022 to RMB 45,791 million by 2026, with a compound annual growth rate (CAGR) of approximately 5.9% [13][14]. - Core net profit is expected to increase from RMB 4,520 million in 2022 to RMB 7,692 million by 2026, reflecting a CAGR of 14.2% [13][14]. - The report forecasts a gross margin improvement from 38.5% in 2022 to 45.6% in 2026, driven by cost management and pricing strategies [13][14]. Market Expectations - The report indicates that the market price range for China Resources Beer is between HKD 26.9 and HKD 54.5, with a current market capitalization of HKD 94,568 million [9][10]. - The average daily trading volume over the past three months is reported at HKD 360.7 million [9].