HK Stock Market Move | CHINA RES BEER (00291) rises more than 3%, institutions say that the change of chairman should not cause major changes in the company's strategy, still have confidence in sustainable growth.

CHINA RES BEER (00291) rose more than 3%, as of the time of publication, up 3.6% to HK$25.9, with a turnover of HK$387 million. Morgan Stanley released a research report stating that CHINA RES BEER announced the resignation of chairman Hou Xiaohai, and CEO Zhao Chunwu will temporarily assume the role and responsibilities of chairman during the transition period. Since Hou Xiaohai disclosed in May that he had sold his shares in Run Pi, the event may not have come as a complete surprise to the market. The bank believes that the change in CHINA RES BEER's chairman is unlikely to cause significant changes in the company's strategy, and the market may wait for clarification on the succession plan. The company is expected to focus on product and channel diversification this year to drive beer sales growth and profit margin expansion, and achieve better operational efficiency in each business line. The alcoholic beverage business may continue to face challenges due to weak demand. Citigroup believes that CHINA RES BEER's announcement of Hou Xiaohai's resignation as chairman eliminates market uncertainty about its stock price. Overall, it has not affected confidence in Run Pi's sustainable growth in the future. Citigroup expects Run Pi's pre-tax profit to achieve low double-digit growth in the first half of 2025, while revenue will maintain slight single-digit growth, outperforming BUD APAC's Chinese business. Citigroup is initiating a 30-day upward catalyst observation for CHINA RES BEER.