In the report "Big Banks," CMSC lowered the target price for CHINA RES BEER to 31 yuan and maintained a "Buy" rating

CITIC Securities International's research report points out that although China Resources Beer (00291.HK) is still under pressure in the ready-to-drink channel (with revenue contribution dropping to about 35%), the company demonstrated resilience in overall sales last year, benefiting from single-digit sales growth in non-ready-to-drink channels. Specifically, product performance is differentiated, with Heineken maintaining strong momentum (growth rate of about 20%), SuperX achieving single-digit growth, while low-end products recorded slight positive growth due to the advantages of non-ready-to-drink channels, outperforming expectations. The core is that the company's profit logic remains solid.

The firm also indicated that with the support of the downward trend in raw material costs throughout the year, China Resources Beer is expected to achieve its guidance of high single-digit to double-digit net profit growth by 2025. Additionally, management stated that the liquor business may incur impairment losses. While this move may bring short-term pain, it is seen as beneficial in the long run, as it can eliminate factors that have long suppressed valuations and serve as a catalyst for value enhancement.

Furthermore, the management of China Resources Beer indicated that the dividend payout ratio (excluding potential impairments) is expected to be around 60% in 2025, with plans to increase it to 70% over the next two years, corresponding to a dividend yield of about 5.3% this year.

In light of the weak performance of the liquor business, CITIC Securities International has slightly lowered its revenue forecasts for the fiscal years 2025 and 2026 by about 2%. The forecasts for the beer business remain largely unchanged; the target price has been reduced from HKD 33.5 to HKD 31, based on a projected enterprise value/EBITDA ratio of about 9 times by the end of 2026, consistent with the average level since 2023; maintaining an "Overweight" rating