China Resources(Holdings)Co.,Ltd.

G Sachs Lifts CHINA RES BEER Target to $23; Rated Buy

Time:2017-08-31Source:AAStocks Financial News

Goldman Sachs, in its report, said CHINA RES BEER (00291.HK) reported 1H17 in-line net profit. While ASP growth was slightly slower than expected, this was offset by stable gross profit margin and lower-than-expected A&P spending. The broker believed the company can show a steady product mix upgrade; brand re-build initiatives over next 2-3 years; less mainstream competition ahead; and capacity rationalization.

 

The broker believed that CHINA RES BEER can post 26% EBITDA and 21% earnings growth yearly in 2H17 (excluding impairment), driven by a faster topline and much lower A&P ratio as competition tapers. The broker kept Buy with target price raised from $22.5 to $23. (AAStocks Financial News) 2017/08/22