The Zhitong Finance App learned that UBS released a research report stating that it will lower the target price of China Resources Beer (00291) by 6.3% from HK$31.34 to HK$29.36 to maintain a “buy” investment rating. China Resources Brewery's revenue/profit for the first half of the year was RMB 24.24 billion and RMB 5.169 billion, up 1.2%/10.7% year-on-year respectively, slightly lower than market expectations of 1%/2%. Beer revenue increased 2.2% year over year, but liquor revenue decreased 27% year over year. In the first half of the year, gross margin and net profit margin were 47.7%/21.3% respectively, down 1.2 percentage points/2.9 percentage points year on year, mainly due to the increase in packaging costs in the beer business.
According to the report, in the beer business, management reiterated the strategy of prioritizing increasing the overall sales scale and further allocating resources to key brands and products. Looking ahead, management expects that when the share of sales in the middle and high-end categories increases to 30-35%, and other categories remain stable, high-end will significantly increase the overall average sales price. Regarding the liquor category, the company expects that in the context of industrial restructuring and consumption polarization, this category will face a long adjustment cycle. To this end, China Resources Brewery is working to strengthen its position in the core market and basic market while promoting channel governance and cost efficiency improvements. If the business continues to face downward pressure, the bank anticipates a possible impairment in the second half of 2026.