[ET Net News Agency, 28 January 2019] Goldman Sachs lowered its target price for China
Resources Beer (CRB)(00291) to HK$33 from HK$34 and maintained its "buy" rating.
The research house reduced its 2018-20 recurring EPS estimates for CRB by 9%/5%/5% to
reflect the higher severance costs due to faster-than-expected factory closures and slower
GPM expansion.
While near-term growth may be impacted by declining volume growth, brand investments and
higher one-off costs, Goldman believes CRB's focus on premium market share and cost
efficiency remain intact.
For 2019, Goldman looks for 120bps of core margin expansion, coming from the muted COGS
pressure, better labor/production cost efficiency, and still-steady mix/ASP increase. (KL)