Citi has released a research report indicating adjustments to its earnings forecasts for China Res Beer (00291), trimming net profit projections for 2026 through 2028 by 13%, 12%, and 12%, respectively. Despite these downward revisions, the firm maintains a "Buy" rating while lowering the target price from HK$39.8 to HK$34.23, and continues to list the company as its top pick in the sector.

In the first half of the year, beer sales volume for China Res Beer grew 2% year-on-year. However, due to a decline in average selling prices for mid-range and lower-tier products, coupled with rising aluminum can costs, the company's gross margin contracted by 1.2 percentage points on an annual basis. Looking ahead, Citi anticipates that with a lower comparison base in the second half, full-year beer sales volume will increase by 3% year-on-year, while the beer EBIT margin is expected to narrow by 10 basis points year-on-year.

Additionally, management has outlined plans to raise the dividend payout ratio to above 55%, a move that could provide support for the stock price moving forward.