On Tuesday, Nomura/Instinet adjusted its price target for China Resources Beer Holdings Co Ltd. (291:HK) (OTC: CRHKY) shares, reducing it to HK$40.10 from the previous HK$45.00 while maintaining a Buy rating on the stock. The adjustment follows the company's first-half financial results for 2024, which showed a slight revenue decline and weaker-than-expected earnings.
China Resources Beer reported its financial performance for the first half of 2024 on August 19. The company experienced a marginal revenue drop of 0.5% year-over-year to CNY23.7 billion, which aligned with the Bloomberg consensus.
Despite this, the company's earnings before interest and taxes (EBIT) for the period were 3% below consensus estimates, coming in at CNY6.4 billion, which still marked a 2% increase from the previous year.
The company's interim earnings increased modestly by 1% year over year to CNY4.7 billion. Additionally, China Resources Beer declared an interim dividend of CNY0.373 per share, a 30% increase from the previous year. This rise in dividends corresponds with a 6 percentage point improvement in the dividend payout ratio to approximately 26%.
The report highlighted the success of China Resources Beer's premiumization strategy, despite noting a slowdown in sales and profit growth. The company's efforts to upscale its product offerings appear to have had a positive impact, although they were not enough to counteract the overall deceleration in financial performance.
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