In "The Big Banks," China International Capital Corporation (CICC) lowered the target price for CR BEVERAGE to 12 yuan and maintained the "outperform industry" rating

CICC published a report stating that CR Beverage (02460.HK) achieved results in the first half of the year that met the bank's expectations. Revenue was RMB 6.206 billion, a year-on-year decrease of 18.5%, and net profit was RMB 805 million, a year-on-year decline of 28.6%. The performance was in line with previous forecasts.

The bank expects that in the second half of the year, the company's efforts to enrich its product matrix and deepen channel reforms are likely to continue, believing that the short-term adjustments are to build momentum for long-term development. The bank anticipates that the company's operating conditions will improve after entering the beverage peak season, with packaging water and beverage sales potentially achieving year-on-year growth in July and August. On the profit side, considering the ongoing intense channel competition, the bank expects the company to maintain high investments in channels and terminal expenses in the second half of the year to solidify market share.

Considering the intensified industry competition, the bank has lowered its profit forecasts for CR Beverage for 2025/2026 by 18%/2% to RMB 1.09 billion/1.53 billion. The company's current trading is at 22.5/15.8 times the forecasted price-to-earnings ratio for 2025/2026; the target price has been reduced by 29% to HKD 12, corresponding to 24.2/16.9 times the forecasted price-to-earnings ratio for 2025/2026, maintaining an "outperform the industry" rating