2024-03-18 16:00Investment Rating - The report maintains a "Buy" rating for China Resources Beer with a target price of HKD 47.0, representing a potential upside of 23.8% from the current price of HKD 38.0 [8][23]. Core Insights - China Resources Beer is positioned as one of the strongest players in the high-end beer market, supported by a robust product matrix and channel operation capabilities. The management's deep understanding of the liquor market enhances confidence in future growth, particularly in the white liquor segment [7][18]. - The company is expected to continue its revenue structure's high-end transformation, with significant growth in premium products like Heineken and Pure Draft, which saw sales growth of nearly 60% and high double-digit growth, respectively, in 2023 [7][18]. - The beer business is projected to experience strong margin expansion due to the rapid growth of high-end products, effective pricing management, and a decrease in production costs [7][18]. Financial Performance and Forecast - Revenue for 2024 is estimated at RMB 41,575 million, reflecting a year-on-year growth of 6.8% [12][20]. - Core net profit is forecasted to reach RMB 6,259 million in 2024, with a year-on-year increase of 19.0% [12][20]. - The report predicts a gross margin of 43.5% for 2024, up from 41.4% in 2023, indicating a continued focus on high-margin products [12][20]. Business Segments - The beer segment is expected to maintain a strong growth trajectory, with a target of 270-290 million tons in sales for premium and above products in 2024 [7][18]. - The white liquor segment, while still in its early stages, is anticipated to contribute positively to the company's long-term growth through a diversified product portfolio and strict pricing controls [7][18]. Valuation Methodology - The report employs a Sum-of-the-Parts (SOTP) valuation method, applying a 15x EV/EBITDA multiple for the beer business and a 12x P/E multiple for the white liquor business, leading to a target price of HKD 47.0 [18][19].