UBS has released a research report indicating a 6.3% reduction in the target price for China Res Beer (00291), lowering it from HK$31.34 to HK$29.36, while reaffirming its "Buy" investment rating. The company's first-half revenue and profit stood at RMB 24.24 billion and RMB 5.169 billion respectively, representing a year-on-year increase of 1.2% and a decrease of 10.7%, slightly missing market expectations by 1% and 2%.

Beer revenue saw a 2.2% year-on-year increase, but baijiu revenue dropped by 27% during the same period. In the first half, the gross margin and net profit margin were recorded at 47.7% and 21.3%, reflecting a year-on-year decline of 1.2 percentage points and 2.9 percentage points respectively, primarily due to rising packaging costs in the beer segment.

The report notes that in the beer business, management has reiterated its strategy to prioritize overall sales volume growth while reallocating resources toward key brands and products. Looking ahead, management anticipates that when the sales proportion of mid-to-high-end and above categories rises to 30-35%, and other categories remain stable, premiumization will significantly boost the overall average selling price.

Regarding the baijiu category, the company expects a prolonged adjustment period amid industrial restructuring and consumption polarization. To address this, China Res Beer is focusing on strengthening its position in core and foundational markets while promoting channel governance and cost efficiency improvements. Should the business continue to face downward pressure, UBS projects that an impairment might occur in the second half of 2026.