Core Viewpoint - The company reported a stable performance in H1 2025, with revenue growth driven by high-end product sales, while the white liquor segment faced challenges due to policy impacts on consumption [1][2][3] Financial Performance - In H1 2025, the company achieved revenue of 23.94 billion yuan, a year-on-year increase of 0.8% [1] - EBIT reached 7.69 billion yuan, up 20.8% year-on-year, and net profit attributable to shareholders was 5.79 billion yuan, reflecting a 23.0% increase [1] - The interim dividend was set at 0.464 yuan per share, a 24.4% increase, maintaining a payout ratio of 26% [1] Beer Segment Analysis - Beer sales volume in H1 2025 was 6.487 million kiloliters, an increase of 2.2%, with an average price of 3,570.4 yuan per kiloliter, up 0.44% [1] - High-end products saw sales growth exceeding 10%, while mid-to-low-end products experienced slight increases due to a large base [1] - Specific brands like Heineken and Old Snow reported sales growth of over 20% and 70% respectively, with Red Duke doubling its sales [1][2] Cost and Margin Improvement - The beer business achieved a cost of 1,845.9 yuan per kiloliter, a decrease of 4.2%, leading to a gross margin of 48.3%, up 2.5 percentage points year-on-year [2] - The company implemented a digital system to enhance operational efficiency across procurement, supply chain, and marketing, contributing to cost control [2] White Liquor Segment Challenges - The white liquor segment reported revenue of 0.781 billion yuan, a decline of 34.0%, primarily due to policy disruptions affecting consumption [2] - The EBITDA for the white liquor segment was 0.22 billion yuan, down 47.2%, with EBIT losses of 0.15 billion yuan, a decline of 0.20 billion yuan year-on-year [2] Strategic Outlook - The company is focusing on high-end product development and operational efficiency through the "Three Precision" strategy, aiming to enhance profitability [3] - The company adjusted its profit forecasts for 2025-2027 to 5.87 billion, 6.40 billion, and 6.79 billion yuan respectively, maintaining a target price of 40 HKD, corresponding to a PE ratio of approximately 20X [3]

Core Insights - The company achieved a revenue of 23.942 billion yuan in the first half of 2025, representing a year-on-year growth of 0.8% [1] - EBIT reached 7.691 billion yuan, up 20.8% year-on-year, while net profit attributable to shareholders was 5.789 billion yuan, increasing by 23.0% [1] - The beer business continues to focus on high-end strategies, with a revenue of 23.161 billion yuan, a 2.6% increase year-on-year, and beer sales volume rising by 2.2% to 6.487 million tons [1] Beer Business Performance - The average selling price of beer increased by 0.4% to 3,570 yuan per ton, driven by the growth of high-end products [1] - The sales volume of premium and above beer products grew by 10%, with notable increases in Heineken (20%), Old Snow (70%), and Red Duke (100%) [1] - Gross margin improved by 2.5 percentage points to 48.3% due to product mix optimization and cost advantages [1] White Wine Business Challenges - The white wine business reported a revenue of 0.781 billion yuan, a decline of 33.7% year-on-year, with high-end products contributing nearly 80% of the revenue [1] - EBITDA for the white wine segment fell by 47.1% to 0.218 billion yuan [1] - The company is implementing a dual empowerment strategy for beer and white wine, focusing on price restructuring and enhanced cost control while promoting mid-range and light bottle products [1] Future Outlook - The company maintains a "buy" rating with a target price of 35.0 HKD per share, reflecting a potential upside of 23.8% based on a projected PE of 18.4 times for 2025 [2] - Profit forecasts for 2025-2027 have been slightly adjusted, expecting net profits of 5.646 billion, 5.702 billion, and 6.214 billion yuan respectively [2]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 35.0 per share, indicating a potential upside of 23.8% from the current price of HKD 28.28 [1][6][15]. Core Insights - The company has successfully implemented a high-end strategy and the "Three Precision" approach, resulting in a revenue of RMB 239.42 billion for the first half of 2025, a year-on-year increase of 0.8%. EBIT grew by 20.8% to RMB 76.91 billion, and net profit attributable to shareholders increased by 23.0% to RMB 57.89 billion [3][8]. - The beer segment continues to focus on high-end products, with revenue reaching RMB 231.61 billion, up 2.6% year-on-year, and sales volume increasing by 2.2% to 6.487 million tons. The average selling price rose by 0.4% to RMB 3,570 per ton, driven by the growth of premium products [4][10]. - The white wine segment faced challenges, with revenue declining by 33.7% to RMB 7.81 billion, and EBITDA dropping by 47.1% to RMB 2.18 billion. The company is actively adjusting its strategy to enhance the performance of its white wine products [5][14]. Financial Summary - For the first half of 2025, the company reported a gross margin of 48.9%, an increase of 2.0 percentage points year-on-year, and a net profit margin of 24.2%, up 4.4 percentage points [8]. - The company expects net profits for 2025 to be RMB 56.46 billion, with projections of RMB 57.02 billion and RMB 62.14 billion for 2026 and 2027, respectively [6][15]. - The financial outlook includes a slight adjustment in profit forecasts due to one-time contributions and ongoing adjustments in the white wine business [6][15].

Investment Rating - The report maintains an "Outperform" rating for China Resources Beer Holdings [2][7] Core Views - The company is experiencing a clear earnings recovery with attractive valuation, supported by a strong premiumization strategy and cost optimization efforts [1][4][6] - The target price has been adjusted to HK$36 from HK$48, reflecting a 20x PE for 2025 [7][16] Summary by Sections Beer Business - The company is focusing on premiumization and cost optimization, with a clear growth momentum in the peak season. The "Three Refinements" strategy has led to the closure of inefficient factories and a reduction in sales and administrative expense ratios [4][13] - Despite a 2.5% YoY decline in beer sales volume due to weak catering demand and adverse weather, premium products saw over 9% growth, with Heineken's sales growing nearly 20% [4][13] - The beer gross margin improved by 0.9 percentage points to 41.1%, driven by a 1.5% increase in average selling price [4][13] Baijiu Business - The baijiu segment is led by the "Zhaiyao" product, which achieved a 35% YoY volume growth in 2024, contributing over 70% of baijiu revenue [5][14] - The company is focusing on core market strategies in regions like Henan and Shandong to accelerate the national expansion of "Zhaiyao" [5][14] 2025 Outlook - The outlook for 2025 indicates improved beer sales and profitability, driven by favorable weather conditions and new production capacity in Fujian [6][15] - The company aims for a beer gross margin of over 42% in 2025, supported by cost reductions and enhanced channel collaboration [6][15] Financial Performance - The report projects revenue growth from RMB 38.635 billion in 2024 to RMB 40 billion in 2025, with net profit expected to rise from RMB 4.739 billion to RMB 5.288 billion [2][12] - The diluted EPS is forecasted to increase from RMB 1.46 in 2024 to RMB 1.63 in 2025, reflecting a positive trend in profitability [2][12]