HK Stock Market Move | CR BEVERAGE(02460) surges over 3% with the company's vertically integrated model driving higher gross profit and rapid expansion of the beverage department.

CR BEVERAGE (02460) rose more than 3%, as of the time of publication, it rose 3.04% to 11.54 Hong Kong dollars, with a turnover of 12.6614 million Hong Kong dollars. HSBC Research released a research report pointing out that CR BEVERAGE is a debt-free state-owned enterprise, with 90% of its revenue coming from bottled drinking water business. Its beverage sector is also rapidly expanding, becoming the second growth driver. However, the stock has fallen by 23% since its listing in October last year, with concerns in the market about intense competition and how the company can improve its profits. The bank believes that since its listing last year, the company's trading has been at a discount compared to its peers, but the vertical integration model can drive higher gross profit. Although price competition in bottled water is unlikely to ease, the bank believes that through vertical integration and increasing product penetration, the company can achieve stronger profit growth than its food and beverage peers, considering this as the main catalyst for a revaluation.