In a report released today, Miao Zhang from CMB International Securities maintained a Buy rating on China Resources Beverage (Holdings) Company Limited (2460 – Research Report), with a price target of HK$18.61.
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Miao Zhang’s rating is based on a combination of factors that highlight the potential for growth and profitability in China Resources Beverage (Holdings) Company Limited. Despite a flat revenue growth in FY24 due to competitive pressures and adverse weather conditions, the company achieved a significant increase in net profit, surpassing estimates. This was largely due to an improved gross margin, driven by a higher proportion of self-owned capacity, which is expected to reach 70% by 2025, supporting sustained profit growth.
Miao Zhang also notes the company’s strong position in the packaged water market and the promising prospects of its beverage segment, projecting a compound annual growth rate in revenue and net profit for the coming years. Additionally, the company’s decision to offer a special dividend, alongside a stable dividend payout ratio, enhances shareholder returns and reflects a commitment to balancing growth with investor rewards. These factors collectively support the Buy rating, with a target price set based on future earnings projections.