Damo: Lowering the target price of China Resources Brewery (00291) to HK$30 to maintain “gain” rating

The Zhitong Finance App learned that Morgan Stanley released a research report stating that it lowered the target price of China Resources Beer (00291) from HK$35 to HK$30 to maintain the “gain” rating. Based on the performance of the first half of the year and weakening short-term demand prospects, the net profit forecast for the full year of this year was lowered by 9.5% to RMB 5.5 billion. It is believed that demand from the catering channel is still weak. Coupled with the adverse effects of the weather, beer sales growth will slow down, while the Group's high-end strategy will still take time to increase the overall product portfolio. Currently, average sales price growth is moderate.

In addition, due to rising packaging costs and weakening operating leverage, Damo expects Runbeer's short-term gross margin to be pressured. With the 2026 base already lowered, the profit forecast for 2027 to 2028 was also lowered by 12%, but the medium-term high-end trend remained unchanged. Damo predicts that China Resources Brewery's 2026 beer sales will increase 3% year over year, driven by 0.9% sales growth and 1.7% average sales price increase. Regular net profit will drop 3% year over year to 5.5 billion yuan.