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<Research> G Sachs Lowers TP for CHINA RESOURCES BEER (02460.HK) to HKD8.5 and Cuts Earnings Forecast, Rating 'Neutral'
Recommend 4 Positive 3 Negative 2 |
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G Sachs published a research report stating that CHINA RESOURCES BEER (02460.HK) met expectations with last year's performance. Considering the intense market competition, the sales forecast for 2026 to 2028 has been lowered by 2% to 4%. Additionally, due to a decline in the gross profit margin of the beverage portfolio and an increase in expense ratios, the earnings forecast for the same period has been reduced by 9% to 14%. The firm has lowered the target price for CHINA RESOURCES BEER from HKD9 to HKD8.5, maintaining a 'Neutral' rating. The new target price is based on a forecasted P/E ratio of 16.5x for 2027, consistent with the target P/E ratios of peers TINGYI (00322.HK) and UNI-PRESIDENT (00220.HK). G Sachs cited management's statement during the earnings conference that the goal for the packaged water business in 2026 is to return to positive growth, with a good start already observed in January and February, as both shipments and terminal sales recorded positive growth. The target for the beverage business is to return to the level of the first half of 2025, with a YoY growth of 21%. The long-term goal is to increase the beverage sales share to 30% by 2030. The company will focus on expanding product lines such as 'Mulene', 'Chrysanthemum Tea', and 'Jasmine Tea' to capture changes in consumer preferences. Regarding costs, management indicated that raw material inventory and forward contracts can at least secure costs until May to June. The company has also initiated several cost-saving plans, including deepening digitalization and switching packaging from cartons to film packaging to partially offset raw material inflation pressures. In terms of channel strategy, the company will focus on enhancing channel capabilities in 2026, optimizing traditional channel investments and distributor incentives, and expanding partnerships with food discount chains like 'Ling Snacks', 'HotMaxx', and 'Happy Monkey', as well as exploring catering and large retail channels. In terms of capacity, the proportion of self-production has reached 61%, with a focus this year on advancing the production of the Danjiangkou Water Plant and adding aseptic beverage production lines in Zhaoqing and Yixing. (da/u) Auto-translated by third-party software This translation was auto-generated by third-party software. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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