The analyst rating for CHINA RES BEER (00291.HK) is a "Buy" with a target price of HKD38. The reasons for this rating include:
1. Goodwill Impairment Loss: The company announced a goodwill impairment loss of RMB2.79-2.97 billion for its white liquor business, which was significantly higher than Citi's expectation of RMB300 million. Despite this, Citi expects the company's core net profit for 2025 to be between RMB5.1-5.3 billion, which is 0-6% higher than their previous forecast.
2. Positive Stock Price Reaction Anticipation: Drawing a parallel with MENGNIU DAIRY, which saw a positive stock price reaction to a similar impairment announcement, Citi anticipates that CHINA RES BEER's stock price will also perform positively following the announcement.
3. Top Picks in the Sector: CHINA RES BEER remains one of Citi's top picks in the Chinese consumer sector, indicating strong confidence in the company's future performance relative to its peers.
Overall, the combination of expected profit growth, positive market reaction, and strong positioning within the sector supports the "Buy" rating.
