Investment Rating - The report assigns an "Outperform" rating to CR Beverage, with a target price of HKD 17.50, indicating an expected return above 10% over the next 12 months [5][10]. Core Insights - CR Beverage is expected to benefit from a dual-driven revenue growth strategy focusing on national expansion and market penetration, with a projected compound annual growth rate (CAGR) of 3.5% for its packaged water segment from FY24 to FY26 [1][9]. - The company plans to enhance its gross margin from 44.7% in FY23 to 49.0% in FY26 by increasing its self-production ratio from approximately 50% in 1H24 to 70% in FY26, supported by a planned investment of 4.3 billion RMB in capacity construction [2][9]. - Adjusted net profit is forecasted to grow at a CAGR of 16.8% from FY24 to FY26, driven by the expansion of self-production facilities and a strong brand presence [2][9]. Summary by Sections Revenue and Profit Forecast - Revenue (in million RMB) is projected to grow from 12,623 in 2022 to 16,443 in 2026, with year-on-year growth rates of 11.3%, 7.1%, 5.3%, 7.0%, and 8.1% respectively [3]. - Net profit (in million RMB) is expected to increase from 990 in 2022 to 2,067 in 2026, with growth rates of 15.3%, 34.3%, 22.3%, 16.3%, and 9.3% [3]. - Diluted earnings per share (in RMB) are forecasted to rise from 0.49 in 2022 to 0.86 in 2026, reflecting similar growth trends [3]. Valuation Metrics - The price-to-earnings (P/E) ratio is projected to decrease from 23.3 in 2022 to 14.4 in 2026, indicating a more attractive valuation over time [3]. - The expected dividend per share (in HKD) is set to increase from 0 in 2023 to 0.28 in 2026, with corresponding yields rising from 1.6% to 2.1% [3]. Market Position and Strategy - CR Beverage holds an 18.4% market share in China's packaged water market, ranking second, with significant growth potential in northern and central-western regions [1]. - The company aims to deepen its market penetration in lower-tier cities and enhance retail network coverage, which is expected to drive market share growth [1].
华润饮料：杯犹未满——区域集中蕴蓄破局之势-20250314