Haitong Int'l report pointed out that China Res Beer (00291.HK) has shown resilience in the face of industry fluctuations, steadily advancing its beer and baijiu dual empowerment strategy, with a firm pace of high-end transformation. In the first half of the year, revenue and net profit were 23.74 and 4.7 billion RMB respectively, down 0.5% and up 1.2% year-on-year. Affected by a high base and adverse weather, beer business revenue reached 22.57 billion yuan, a year-on-year decrease of 1.4%, while sales volume and average price per tonne dropped by 3.4% and increased by 2% respectively year-on-year, with both volume and price performance exceeding the industry average.

The report states that China Res Beer ranked first in domestic beer sales volume, revenue, and profit last year. Although industry demand continued to be under pressure in the second and third quarters of this year, the company's volume and price resilience and high-end transformation pace are superior to the industry average. With a lower base in the fourth quarter, the National Day holiday catering data release signals the stabilization of on-premise consumption channels, and cost reduction also brings certainty to performance. In terms of baijiu, the company has completed the first stage of 'exploration' and entered the second stage of 'development,' expecting rapid growth in the next two years.

Haitong Int'l stated that from performance, valuation, and dividend perspectives, China Res Beer's stock price already has a relatively high margin of safety. The bank expects the company's earnings per share for 2024 to 2026 to be 1.64, 1.83, and 1.96 yuan respectively, originally forecasted at 1.87, 2.14, and 2.42 yuan. The target price has been lowered from 56 to 48 Hong Kong dollars, maintaining an 'outperform the market' rating.