In "The Big Banks," Citigroup lowers the target price for CR BEVERAGE to HKD 13.7, expecting a recovery next year

The research report from Citigroup indicates that CR BEVERAGE (02460.HK) faced a decline in sales and profit margins in the first half of the year due to increased market investment and channel adjustments. The firm expects this pressure to continue in the second half of the year as the company remains committed to active market investment.

Although bottled water sales have gradually rebounded to positive year-on-year growth between July and August, the firm still estimates that CR BEVERAGE's net profit for the full year 2025 will decline by 34% year-on-year to RMB 1.07 billion, but anticipates a turning point and recovery next year.

The firm has lowered its earnings forecasts for CR BEVERAGE for 2025 and 2026 by 10% to 20%, to RMB 1.074 billion and RMB 1.451 billion, respectively. The target price has been reduced from HKD 14.2 to HKD 13.7, equivalent to a forecasted price-to-earnings ratio of 18 times for the next 12 months, maintaining an "outperform" rating