2024-03-19 16:00Investment Rating - The investment rating for China Resources Beer is "Buy" with a target price of 48 HKD, indicating a potential upside of 26% from the current price of 37.95 HKD [3][9]. Core Insights - In 2023, China Resources Beer reported a revenue of 38.9 billion RMB, a year-on-year increase of 10%, and a net profit of 5.1 billion RMB, up 18% year-on-year, aligning with market expectations [1]. - The sales volume reached 11.15 million kiloliters, a slight increase of 0.5% year-on-year, with premium and above products showing significant growth, particularly Heineken, which saw a growth rate exceeding 60% [1]. - The company has successfully entered the liquor market through the acquisition of a 55.2% stake in Jinsha Liquor, generating 2.06 billion RMB in revenue from this segment in 2023 [1]. - A special dividend of 0.3 RMB per share was declared, with an expected total dividend payout of 0.936 RMB per share for the year, resulting in a payout ratio of 59% [1]. Financial Performance Summary - Revenue and Profitability: - 2023 revenue: 38.9 billion RMB, 10% growth - 2023 net profit: 5.1 billion RMB, 18% growth - Gross margin: 41.4%, up 2.9 percentage points year-on-year - Net margin: 13.4%, up 1.1 percentage points year-on-year [1][8]. - Earnings Per Share (EPS) Forecast: - 2024 EPS: 1.91 HKD - 2025 EPS: 2.10 HKD - 2026 EPS: 2.23 HKD [1][8]. - Valuation Metrics: - The average P/E ratio for comparable companies is projected at 19x for 2024, while China Resources Beer is assigned a P/E of 25x, leading to a target price of 48 HKD [9][12]. Market Position and Strategy - The company is focusing on high-end products, with plans to enhance its presence in the premium market segment, particularly targeting products priced above 10 RMB [1]. - The integration of the liquor business is expected to provide additional growth opportunities, with a focus on regions with high penetration rates for sauce liquor [1]. Shareholder Structure - Major shareholders include China Resources Group with 31.1% and Heineken Group with 20.8% [5]. Market Performance - The stock has shown a relative return of 17.47% over the past month and 12.47% over the past three months, although it has declined by 23.45% over the past year [7].