The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that the risk-return ratio of China Resources Beer (00291) seems to be quite attractive, because its current transaction price is about 10 times the estimated price-earnings ratio in 2027, and the dividend rate is 5.5%. The bank lowered the target price-earnings ratio from 15 times to 14 times (based on the estimated price-earnings ratio in 2027), which is in line with the global beer industry level. The target price was lowered from HK$34 to HK$28, maintaining the “increase in holdings” rating.
Motong said that China Resources Brewery's revenue for the first half of the year increased by 1.2% year on year, lower than market expectations of 2.2%, and net profit fell 11% year on year, far below market expectations and remained roughly the same year on year. The average sales price of beer increased by only 0.5%, less than market expectations of 2%, reflecting the Group's choice to prioritize securing market share and maintaining a mass market base rather than driving up prices by reducing low-end sales. Motong pointed out that the high-end trend continues. Sales of high-end and high-end beer have all recorded double-digit growth, but the pace is slower than market expectations. High-end beers account for 27%, which is still not enough to completely offset the pressure on the middle and low end markets. New channel partnerships contribute to incremental growth (accounting for less than 1% of sales) and help improve consumer insight.