Bank of America: China Resources Beer's impairment of goodwill has removed uncertainties, maintaining a "buy" rating.

Bank of America Securities published a research report stating that concerns about potential impairment of goodwill have been a major uncertainty in the past six months during the current downturn in the liquor industry. The bank views the profit warning from China Resources Beer as an event to dispel doubts. China Resources Beer's core beer business remains healthy, and it is expected that the revenue and net profit attributable to shareholders of this segment will grow by low single digits and over 10% annually by 2025. Channel checks show that among the three major beer companies in China, China Resources Beer may be the only company that has recorded positive sales growth since the beginning of 2026. The bank expects that non-cash impairment will not affect dividends, and the dividend payout ratio for 2025 will be higher than that of 2024. Based on three key reasons, the bank maintains a "buy" rating on China Resources Beer with a target price of HK$35.6: 1) China Resources Beer's market share is still expanding due to its proactive response to channel fragmentation and diverse demand; 2) the stock has been noticeably lagging in the Chinese consumer goods sector over the past six months, and with short-term uncertainties being eliminated, the stock price is expected to catch up; 3) there are three catalysts that could drive a potential revaluation in the second quarter, including a possible recovery in the restaurant channel, the peak season in the second quarter, and the World Cup in June.