BOC International: Lowering the target price of China Resources Beer (00291) to HK$32 and reaffirms that the “purchase” cost side faces headwinds

The Zhitong Finance App learned that BOC International released a research report stating that considering raw material cost pressure and uncertainty about the pace of demand recovery, China Resources Brewery (00291)'s profit forecast for 2026-28 was lowered by 3% to 6%, and the target price was lowered to HK$32. We are still optimistic about the company's long-term development logic of high-end beer and maintain a “buy” rating. China Resources Brewery remains the company of choice in the beer industry.

According to BOC International, China Resources Brewery's main beer business developed steadily in the first half of the year, and high-end technology continued to advance, but the cost side faced headwinds. Revenue for the first half of the year increased 1.2% year over year to RMB 24.2 billion (same below). Among them, beer business revenue increased 2.2% year over year, and overall performance was steady. Beer sales increased 1.7% year-on-year, better than the performance of peers; sales of sub-premium products increased by more than 10% year-on-year, and the high-end trend continued. On the profit side, rising costs of packaging materials, etc. caused a certain drag on profit release. At the same time, the liquor business is still in the adjustment stage; after finally excluding the impact on revenue related to the Shenzhen headquarters, EBITDA fell by about 1.2% year-on-year in the first half of the year.