[ET Net News Agency, 5 November 2019] Jefferies Research initiated coverage on China
Resources Beer (CRB)(00291) with a "buy" rating and a target price of HK$48.
The research house said CRB is the largest brewer by volume in China but has higher
exposure to the mid/low-end category. CRB became Heineken's China licensee in 2019. From
2020, management begins increasing its investment in premium brands and channels. It has
the goal of becoming the industry leader in the premium beer sector in 3-5 years' time.
In the past 3 years, CRB's management has closed down nearly 20 factories and reduced
its headcount by 25,000, a rare achievement among China state-owned enterprises. Jefferies
said this demonstrates management's strong execution prowess.
It expects CRB to deliver CAGR of 9% on sales, 15% on EBITDA, and 18% on net profit for
2018-21. (KL)