Goldman Sachsh raised its target price for China Resources Beer (CRB)(00291) to HK$20.5 from HK$19.5, and maintained its "buy" rating.
The research house sees CRB as on the right track to deliver strong ASP growth through mix upgrade. With further volume market share gain and contained capex, Goldman believes CRB will also benefit from operating leverage (D&A ratio to drop 80bps by 2018).
Goldman now expects 7% sales CAGR and a further 130bps OPM improvement over 2 years, driven by continued mix upgrade and a more contained competitive environment. It adjusted its recurring EPS by +/-2%, reflecting the higher SG&A and lower tax expenses.
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