China Resources Beer (Holdings) Co Ltd

00291: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$88.00	Lqsjw	Xhnfcgfy

CR Beer Earnings: Soft Volume Dragged Earnings Growth; Retain Fair Value

Jacky Tsang

Aug 20, 2024

Narrow-moat China Resources Beer’s interim results trailed our estimates due to soft volume and price growth. We cut our 2024 revenue and net income projections by 3% and 5%, respectively, but our 2025-28 forecasts are largely unchanged. Hence, we retain our fair value estimate at HKD 45 per share, implying 25 times 2024 price/earnings, 14 times enterprise value/EBITDA, and 1.8% dividend yield. Shares are undervalued currently, but our top sector pick is Budweiser APAC—we think the latter is better poised to benefit from the long-term premiumization trend in China’s beer market.

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