Lyon: Downgrade China Resources Beer (00291) target price to HKD 31.5, maintaining a "Outperform" rating.

Lyon released a research report stating that the beer industry is facing challenges this summer. Although China Resources Beer (00291) has shown better performance than the industry in terms of beer sales growth and product structure upgrades, profits are still being eroded by high aluminum prices. The firm has lowered its profit forecast for China Resources Beer for 2026 to 2028, reflecting weak demand and raw material pressures, adjusting the target price from HKD 34.6 to HKD 31.5, while maintaining an "Outperform" rating. The firm expects raw material pressures to persist until the third quarter, easing somewhat in the fourth quarter. It noted that China Resources Beer's sales in the first half of the year grew by 1.2% year-on-year, meeting expectations; however, net profit fell by 10.7% year-on-year due to a higher base from one-time gains from land sales last year; the profit margin was 47.7%, which was below expectations.