Citibank: Lowering the target price of China Resources Breweries (00291) to HK$34.23 to maintain the “buy” rating

The Zhitong Finance App learned that Citibank released a research report saying that the bank lowered China Resources Beer (00291)'s net profit forecast for 2026 to 28 by 13%, 12%, and 12%, respectively, to maintain a “buy” rating, but lowered the target price from HK$39.8 to HK$34.23. The bank continued to list Run Beer as the preferred stock in the industry.

In the first half of the year, China Resources Brewery's beer sales increased 2% year over year. However, due to a drop in the average price of mid-range and lower products and an increase in the cost of aluminum cans, the gross margin of China Resources Brewery narrowed 1.2 percentage points year over year. The bank expects that due to the low base in the second half of the year, it is expected that the annual beer sales of Runbeer will increase 3% year over year, and beer EBIT profit margin will narrow by 10 basis points year over year. Additionally, management plans to increase the dividend payout ratio to over 55%, which may support the stock price.