Goldman Sachs: Slightly lowers target price for China Resources Beer (00291) to 34.73 Hong Kong dollars, outlook turning positive after earnings call.

Goldman Sachs released a research report saying that after attending the CHINA RES BEER (00291) performance release conference, their view on the company has become more positive. The management reiterated their commitment to advancing the high-end market and has prepared for the gradual recovery of the catering channel in the second half of 2026 by promoting products and launching new products. They also reiterated their mid-term dividend payout ratio target of 60% to 70%. The bank raised its net profit forecast for the Rudd Beer for the next two years by about 1% due to the steady performance of CHINA RES BEER's 2025 recurring EBIT. However, considering the increase in cost pressures in the surrounding years, the target price was lowered from 35.4 Hong Kong dollars to 34.73 Hong Kong dollars, based on a forecasted 17 times price-to-earnings ratio for 2027 (previously 19 times); it also believed that the current risk-return ratio is attractive and reiterated a "buy" rating. CHINA RES BEER management revealed that the beer business had a good start in 2026, with positive growth in sales volume and average price in the first two months of the year, driven by the high-end market and consumer promotion, despite the uneven recovery of the catering channel. The company strategically reinforced investment in the price category of 8 to 10 yuan per 500 milliliters, and is expected to launch new products to further drive the high-end market. In terms of costs, raw materials and packaging material prices have been largely fixed, and it is expected that beer unit costs may slightly increase but remain within a controllable range. In the white wine business, the management will continue to optimize the product portfolio and maintain investment in the core customer group, but industry recovery may still fluctuate.