Core Insights - The company's beer business performance in 1H25 slightly exceeded expectations, driven by improved gross margins and reduced sales expenses [1] - The white liquor business faced greater-than-expected pressure, with a significant revenue decline [2] Beer Business Performance - 1H25 revenue reached 23.94 billion yuan, a year-on-year increase of 0.8%, with core EBIT at 7.11 billion yuan, up 11.3% [1] - Beer revenue was 23.16 billion yuan, reflecting a 2.6% year-on-year growth, with sales volume increasing by 2.2% and average selling price (ASP) rising by 0.4% [1] - The gross margin improved by 2.5 percentage points to 48.3%, benefiting from a 4.2% decrease in ton cost [1] - The high-end product segment saw a 20% increase in sales volume, while the restaurant channel remained under pressure [1] White Liquor Business Performance - The white liquor segment reported a revenue decline of 33.9% in 1H25, with EBITDA down 47.2% to 218 million yuan [2] - The company plans to launch new products priced between 100-300 yuan to strengthen the brand and improve channel profitability [2] - The white liquor business is expected to gradually adjust in line with industry trends, potentially laying the foundation for future growth [2] Future Outlook - The beer business is anticipated to maintain stable performance in the second half of the year, with expectations for low growth in both sales volume and ton price [2] - The company forecasts a gross margin increase of over 1 percentage point for the full year, supported by a decrease in unit costs [2] - The target price is set at 32.4 HKD, indicating a 15% upside potential from the current stock price [2]

Group 1 - The core viewpoint of the report maintains the 2025/26 core net profit estimates for China Resources Beer at 5.31/5.75 billion HKD, with a target price of 32.4 HKD, indicating a 15% upside potential from the current stock price [1] - The beer segment's performance in 1H25 slightly exceeded expectations, with revenue of 23.94 billion HKD, a year-on-year increase of 0.8%, and core EBIT of 7.11 billion HKD, a year-on-year increase of 11.3% [2] - The beer business outperformed the overall industry, benefiting from a decrease in raw material costs, with a year-on-year decline in ton cost of 4.2% and an increase in gross margin by 2.5 percentage points to 48.3% [3] Group 2 - The white liquor business faced greater pressure than market expectations, with a revenue decline of 34% in 1H25 and EBITDA down by 47.2% [4] - The company plans to launch products priced between 100-300 HKD to strengthen the brand and adjust the pricing system to ensure channel profitability [4] - The outlook for the beer business in the second half of the year remains stable, with expectations of maintaining low growth in both sales volume and ton price, while the gross margin is projected to increase by over 1 percentage point [4]