＜Research＞CMS Suggests CHINA RES BEER (00291.HK) Shr Price Digested 1H Results, Lowers TP to $37

　　A recent China Merchants Securities (CMS) report reveals that CMS expects CHINA RES BEER (00291.HK) -0.600 (-2.128%) Short selling $39.69M; Ratio 36.528% to have flat 1H results with an increase in profit margins driven by efficiency. It believes that the potentially upward replenishment momentum in the peak season justifies the Overweight rating, and that the share price has already digested the 1H results. The company showed signs of demand recovery in early July, but this trend is yet to be confirmed.

　　CMS lowered its full-year revenue growth forecast for CHINA RES BEER from 12.6% to 4.9%, reflecting a flat 1H with 10% growth expected in 2H. The full-year gross margin forecast has been raised by 0.8 ppts to reflect the positive influence of product mix upgrades and cost savings, even though production deleveraging was a drag in 1H. The full-year operating expense ratio has been reduced by 0.5 ppts, reflecting the cost initiatives implemented by management. Following the change in coverage, the target price on CHINA RES BEER has been adjusted to $37 from $45.4. The earnings estimate has also been lowered by 11%.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-19 12:25.)

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