UBS: Maintains "Buy" rating on CHINA RES BEER (00291), target price lowered to HKD 29.36.

UBS released a report stating that it has lowered the target price for CHINA RES BEER (00291) by 6.3% from HKD 31.34 to HKD 29.36, while maintaining a "Buy" investment rating. In the first half of the year, CHINA RES BEER's revenue/profit was RMB 24.24 billion/RMB 5.169 billion, representing a year-on-year growth of 1.2%/a decline of 10.7%, slightly below market expectations by 1%/2%. Beer revenue increased by 2.2% year-on-year, while liquor revenue decreased by 27%. In the first half of the year, gross margin and net profit margin were 47.7% and 21.3% respectively, down 1.2 percentage points and 2.9 percentage points year-on-year, mainly due to rising packaging costs in the beer business. The report stated that in terms of the beer business, management reiterated its strategy to prioritize overall sales growth and further allocate resources to key brands and products. Looking ahead, management expects that as the sales proportion of mid to high-end categories rises to 30-35%, while other categories remain stable, the premiumization will significantly enhance the overall average selling price. For the liquor category, the company anticipates that, against the backdrop of industrial structural adjustments and polarized consumption, this category will face a prolonged adjustment period. To address this, CHINA RES BEER is committed to strengthening its position in core and foundational markets, while also promoting channel governance and cost efficiency improvements. If this business continues to face downward pressure, the firm expects that impairment may occur in the second half of 2026.