20250325-招银国际-华润饮料-02460.HK-FY24__Pleasant_surprises_from_special_dividends_and_target_hike_6页_1mb

CR Beverage (2460 HK) FY24 Performance and Outlook Summary

Core Content

CR Beverage (2460 HK) reported FY24 results with flat revenue and strong net profit growth, despite facing challenges in the packaged water segment and beverage capacity constraints. The company also announced a special dividend, signaling a shift in its shareholder return strategy.

Key Financial Performance

• Revenue: RMB13.5bn (flat YoY), slightly below CMBI's forecast by 6%.
• Net Profit: RMB1.6bn, up 23.1% YoY or 25% excluding listing costs.
• Gross Margin: Increased by 3pct to 47.3%, driven by higher self-owned capacity and lower raw material costs.
• Self-Owned Capacity: Rose from 36% in FY23 to 50% in FY24, with a target of 70% by 2025.

Earnings Summary

Metric	FY23A (RMB mn)	FY24A (RMB mn)	FY25E (RMB mn)	FY26E (RMB mn)	FY27E (RMB mn)
Revenue	13,515	13,521	14,414	15,538	16,989
YoY growth (%)	7.1	0.0	6.6	7.8	9.3
Net Profit	1,329.3	1,636.7	2,028.7	2,405.8	2,783.7
YoY growth (%)	34.3	23.1	23.9	18.6	15.7
EPS (Reported)	0.66	0.79	0.98	1.16	1.34
P/E (x)	21.1	17.7	14.3	12.1	10.4
P/B (x)	3.8	2.4	2.2	2.0	1.8
Yield (%)	0.0	3.4	2.8	3.3	3.8
ROE (%)	21.3	18.0	17.2	18.3	18.8

Key Insights

• Revenue Miss: FY24 revenue was flat YoY, impacted by competition and price concessions in the packaged water segment.
• Beverage Growth: Beverage revenue grew 31% YoY, though below the 40% guidance due to weak consumer sentiment and capacity limits.
• Profitability: Net profit growth exceeded expectations, driven by improved gross margin.
• Shareholder Returns: A 20% special dividend was announced, surpassing expectations and indicating a focus on returns over expansion.
• Dividend Strategy: The company aims to maintain a stable dividend payout ratio of 61%, up from 40% in FY24.

Earnings Revisions

Metric	New Estimate (RMB mn)	Old Estimate (RMB mn)	Diff (%)
Revenue	14,414	15,334	-6.0%
Gross Profit	7,054	7,382	-4.4%
EBIT	2,542	2,511	+1.3%
Net Profit	2,029	1,932	+5.0%
Gross Margin	48.9%	48.1%	+0.8ppt
EBIT Margin	17.6%	16.4%	+1.3ppt
Net Margin	14.1%	12.6%	+1.5ppt

Valuation and Outlook

• Target Price: HK$18.61, based on 18x 2025E PE.
• Upside: 24% from current price (HK$15.02).
• CAGR Projections: Revenue and net profit are expected to grow at 9% and 17% respectively over FY25-27E.
• Catalysts: Potential for hero products or M&A in the beverage segment.
• Risks: Consumer sentiment decline, price wars, product quality issues, and raw material price increases.

Shareholding and Financials

• Shareholding Structure:

  • CRH Beverage Ltd.: 50.0%
  • Plateau Consumer Ltd.: 33.4%

• Stock Data:

  • Market Cap: HK$36,021.0 million
  • Avg 3 mths t/o: HK$56.7 million
  • Total Issued Shares: 2,398.2 million

Valuation Comparison

Company	P/E (2025E)	Rev Growth (%)	NP Growth (%)	GPM (%)	NPM (%)	Payout Ratio	Div Yield (%)
CR Beverage	14.3	6.6	23.9	47.3	12.1	61%	3.5%
Nongfu Spring	26.4	8.4	21.2	59.5	28.1	69%	2.2%
Eastroc Beverage	27.7	40.6	63.1	44.2	21.2	78%	2.1%
Tingyi	16.3	-0.2	19.8	33.1	5.4	100%	5.6%
Want Want China	12.7	2.6	18.4	46.6	16.6	69%	5.2%
U-Presid China	17.5	6.1	10.9	32.5	6.1	100%	5.1%
Yangyuan	18.3	6.1	-6.9	45.1	24.1	138%	7.2%
Chengdelolo	12.6	7.8	7.6	41.0	21.8	66%	4.6%
Lzy	20.7	1.7	9.0	35.1	17.0	83%	3.7%

Analyst Ratings and Recommendations

• Ratings:
  • BUY: Based on 18x 2025E PE, with a target price of HK$18.61.
• Analyst Certifications:
  • The analyst certifies that the views expressed are based on personal judgment and not influenced by compensation.
  • No trading activity in the stock within 30 days prior to the report.
  • No financial interests in the companies covered.

Disclaimer

• Investment Risks: There are risks involved in trading securities. The report is not tailored for individual investors and should not be construed as an offer or solicitation to buy or sell any security.
• Past Performance: Does not indicate future results. Actual events may differ materially.
• Uncertainty: Investment values and returns are uncertain and may fluctuate.

Conclusion

CR Beverage's FY24 performance showed resilience in net profit despite flat revenue, with a strategic shift towards higher shareholder returns. The company's increased self-owned capacity target and improved margins position it for sustained growth in the beverage segment. The BUY rating is maintained with a target price of HK$18.61, based on its strong fundamentals and growth potential.