Goldman Sachs published a report raising the target price of China Resources Beer (0291.HK) from HK$73 to HK$80, maintaining the “buy” rating, and placing the stock on the “convinced buy list”. The bank also maintained its “buy” ratings for Budweiser Asia Pacific (1876.HK) and Tsingtao Brewery (0168.HK). The target prices were raised to HK$29 and HK$107 respectively. Previously, they were HK$26 and HK$94.

The bank continues to expect beer stocks to benefit from China's economic restart, and channel recovery will also unleash strong growth in high-end product sales, drive up gross margin, and at the same time experience cost relief. Even though the bank took into account the impact of the recent COVID-19 pandemic in the mainland on its performance forecast for the fourth quarter of last year, the bank viewed the fourth quarter of last year as a low point in the industry, and improved quarterly in the first quarter of this year, benefiting from a low base in the second quarter. The bank also expects continued increases in alcohol prices and product portfolio upgrades, prompting the bank to expect the average selling price of beer marketer products to increase by 4% to 7% year-on-year.

Among them, in China Resources Beer, the bank's expectations are still focused on the beer business, with strong high-end execution this year and beyond, with a focus on profitability. The liquor business will focus on business transformation in the short term, and the long-term strategy is channel penetration. The bank expects that Runbier will speed up the high-end of its products this year, with an increase in the average price of its products and strong gross margin expansion.