Citi Research lifted its target price for China Resources Beer (CRB)(00291) to HK$48.4 from HK$45.23 and maintained its "buy" rating.
The research house said CRB's 21% core net profit growth in 1H outgrew its top-line expansion (7%), volume growth (3%) and industry volume increase (0.8%), demonstrating its strength of premiumization and initial benefit of its proactive capacity rationalization/staff optimization programs (started 2 yrs ago).
Management's plan to accelerate Heineken's integration with Snow in 2H has reflected Snow's better-than-expected profitability in 1H, Heineken's faster-than-expected ramp-up
& management's stronger confidence in premiumization and earnings growth.
Citi raised its earnings forecasts by 2%/7%/9% in 2019/20/21 to reflect better-than-expected ASP rise and GP margin expansion.
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