CICC: Maintain "outperform" rating on CR BEVERAGE (02460), target price of 10 Hong Kong dollars.

Zhongjin released a research report stating that the profit forecast for CR BEVERAGE (02460) in 2026 is 1.047 billion yuan, and the profit forecast for 2027 is basically maintained. The current trading is at a P/E ratio of 15/13 times for 2026/2027, with a target price of 10 Hong Kong dollars, corresponding to a P/E ratio of 20/17 times for 2026/2027 and a 34% upside potential. The company maintains an outperform industry rating. The company announced that the board of directors plans to distribute dividends to shareholders totaling no less than RMB 0.37 per share each year in the fiscal years 2026 to 2028, including interim, final, and special dividends. Key points from Zhongjin are as follows: Commitment to dividends for the next 3 years makes shareholder returns attractive According to the announcement, the company plans to distribute a total of approximately 8.9 billion yuan in dividends per year from 2026 to 2028, accounting for 90.3% of the net profit attributable to shareholders in 2025. The current valuation corresponds to a dividend yield of about 5.8%, making it attractive for investment. The company's commitment to future absolute dividend amounts demonstrates its focus on long-term and stable shareholder returns, which is considered very attractive in the current volatile external raw materials and market competition environment. Focus on destocking and internal adjustments in the first half of the year, with revenue expected to recover gradually throughout the year It is estimated that the company has been operating steadily since the beginning of the year. In the first half of the year, the company focused on internal adjustments, consolidating sales operations from 23 large regions nationwide to 8 operational units, empowering operational units, increasing incentives for sales staff, and motivating the internal team. With a new marketing director appointed in May to integrate marketing efforts, it is expected that the company will achieve a recovery in revenue for the whole year. The company is still undergoing adjustments in the first quarter of 2026, focusing on reducing inventory levels on the sales side. It is estimated that the company will maintain steady overall sales performance in the first quarter of 2026, with channel inventory levels decreasing by about 40% compared to the same period last year. Considering the relatively high base in the first half of last year, it is expected that the company's revenue in the second half of 2026 will gradually increase. Cost pressures in the second half of the year may cause profit margin disturbances, as internal cost reduction and efficiency improvement initiatives continue Since the beginning of the year, the price of the company's main raw material PET has increased significantly. The company has locked in PET prices for the first half of the year using safety stock methods. Cost pressures in the second half of the year may lead to some gross margin pressures, but the company is expected to partially offset this through cost reduction and efficiency improvement in the supply chain. Due to high promotional expenses impacting profit performance last year, this year's expense allocation is expected to be more balanced between the first and second half of the year. It is predicted that the net profit performance in the first half of 2026 may face some pressure due to the high base last year, but the company is expected to maintain stability throughout the year. Risk warnings: Weak demand; intensified competition; fluctuations in raw material prices.