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CITIC SEC: It is expected that the raw material costs for Beer will remain relatively stable in 2025. Bullish on the performance of liquor companies stabilizing and growing.
It is expected that the overall cost of Beer will remain stable in 2025, with a slight increase in the profitability of brewing companies anticipated. Bullish about the continued stimulus from consumer policies and the recovery of Dining scenarios, the performance of brewing companies is expected to stabilize and grow in 2025.
Hong Kong stocks are moving differently | The liquor sector is collectively warming up with a strong overall consumer atmosphere during the Spring Festival. Baijiu is expected to recover, while Beer sales may improve.
The beverage Sector collectively rebounded; as of the time of writing, CHINA RES BEER (00291) rose by 5.94%, trading at 25.85 HKD; ZJLD (06979) increased by 4.21%, reaching 6.69 CNY; TSINGTAO BREW (00168) went up by 3.8%, priced at 51.9 HKD; BUD APAC (01876) climbed by 2.71%, valued at 7.58 HKD.
Tianfeng's beverage strategy for 2025: Endure until the clouds part and expectations lead the way.
The valuation/emotion of Baijiu(Chinese Liquor) has entered a historical relative bottom Range, Hold Positions of the Fund have hit bottom, it is recommended to focus on two major investment themes.
Bank of America Securities: Reiterates CHINA RES BEER (00291) "Buy" rating, Target Price adjusted to HKD 30.6.
Bank of America Securities predicts that the payout ratio of China Resources Beer will increase from 59% in 2023 to over 70% in the next three years.
Major bank rating | Bank of America: Downgrades CHINA RES BEER Target Price to HKD 30.6, still outperforms peers in a challenging market.
Bank of America Securities expects that CHINA RES BEER's revenue last year decreased by 1.4% (beer down 1.6%; Baijiu(Chinese Liquor) up 3%), and Net income fell by 7.5%. Excluding non-core government subsidies and disposal income, core earnings before tax may grow by 4%. The firm has lowered its earnings per share forecast for 2024/25 by 5%/4%, and reduced the Target Price by 7% to HKD 30.6. Nevertheless, Bank of America Securities still reiterates its 'Buy' rating, as it expects CHINA RES BEER to outperform the top three breweries in China in a challenging market, with the lowest sales decline of 3.1% in 2024, thanks to its proactive self-rescue measures.
Jefferies Adjusts China Resources Beer (Holdings)' Price Target to HK$34.40 From HK$37.38, Keeps at Buy
