Huachuang Securities·2024-03-18 16:00Investment Rating - The report maintains a "Strong Buy" rating for China Resources Beer (00291.HK) with a target price of HKD 53.0, compared to the current price of HKD 37.95 [1]. Core Views - The company achieved a revenue of HKD 38.93 billion in 2023, a year-on-year increase of 10.4%. Core EBIT reached HKD 7.1 billion, up 30%, while net profit attributable to shareholders was HKD 5.15 billion, an 18.6% increase. The core net profit was HKD 5.26 billion, reflecting a 16.3% growth [1]. - The report highlights the solid progress in premiumization and a notable special dividend, with a payout of HKD 0.3 per share, raising the total dividend for the year to HKD 0.936 per share, increasing the payout ratio from 41% in 2022 to 59% in 2023 [1]. Summary by Sections Financial Performance - In H2 2023, revenue increased by 5.7% to HKD 15.06 billion, while core EBIT surged by 152% to HKD 760 million. However, net profit attributable to shareholders decreased by 7% to HKD 504 million, and core net profit fell by 25% to HKD 540 million [1]. - The beer business generated revenue of HKD 139.7 billion in H2 2023, a decline of 2%, with sales volume down 4.6% due to adverse weather and weak consumer spending. The average price per ton increased by 2.8% [1]. Business Segments - The report notes that the premium segment, particularly Heineken and Pure Draft, saw significant growth, with sales volumes in the above 10 HKD price range increasing by nearly 60% to 600,000 tons [1]. - The white liquor segment showed positive results with revenue of approximately HKD 2.07 billion, where the flagship product accounted for 70% of revenue, growing over 20% [1]. Future Outlook - For 2024, the company aims for steady growth in the beer segment, focusing on quality upgrades in mid-range products and further premiumization. The white liquor business is expected to accelerate revenue growth as new products gain traction [1]. - The report adjusts the earnings per share (EPS) forecast for 2024-2026 to HKD 1.91, HKD 2.22, and HKD 2.51 respectively, reflecting a price-to-earnings (P/E) ratio of 18, 16, and 14 times [1].