将最糟糕的留在2025年

Leave the worst behind in 2025 We forecast CR Beverage's FY25E net profit to decline 35.5% to RMB1.06bn,with a steeper drop in 2H25Edue to concentrated signing of large marketingcontracts and increased supply chain investments. Capacity expansion is Target Price(Previous TPUp/DownsideCurrent Price positives:1)The new Chairman has comprehensive experience and isexpected to implement significant reforms, particularlyatsalesend;2)Frontlinesales staff may receive more positive incentives;3)The company may considerraising dividend payout ratio.In summary, wesee2025 astheyearof pressurerelease.We expect the companyto demonstrate better growth during the 15thFive-Year Plan period, with a recovery anticipated as early as 2026. Wemaintain a Buy ratingand lower TPby 8% to HK$11.87to reflectearningsrevisions,the new TPcorresponding to18x 2026E P/E(reflecting1.0x PEG China Consumer Staples Miao ZHANG(852) 3761 8910zhangmiao@cmbi.com.hk Packaged water market share is stabilizing.The company’sinternaldatashows its packaged water market share edged up at end-Q3 from end-Q2, FY2025Eself-owned capacity ratio >60%.The ratio is slightly above 60%,meeting the target butprogress is slower than weexpected due to:1) Longer ramp-up at the Wuyishan factory;2)The Wenzhou Wencheng"lights-out" factory (1.05mn tons) commenced production on Jan 1, 2026,later than the planned 2H25;3)The Danjiangkou plant (1.5mn tons) is Channel reform is on track.The flattening reform (4 tiers to 3 tiers) in tier-1 cities is expected to conclude in Q2 2026. For emerging channels, mostcateringandhouseholdchannel deployment was completed in 2025, with Source: FactSet What'sthe new?1)New Chairman driving change:With extensiveexperience in finance, strategy, sales, and channels, he is expected toconduct reforms, likely starting with sales then production.2)Incentive adjustments: More positive incentives for frontline sales staff are possible.3)Dividend payout ratio: A potential increase is being considered givenweaker 2025 performance. In summary, 2025 is a year of pressure release, Source:Company data,Wind,CMBIGMestimates(updated to26Jan 2026) Disclosures& Disclaimers AnalystCertification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuerthat the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, theanalyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in thisreport; and (4) have any financial interests in the Hong Kong listed companies covered in this report. Important Disclosures There are risks involved in transacting in any securities. The information contained in this report may not be suitable forthe purposes of all investors.CMBIGMdoes not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in thereport.The value of, and returns from, any investments are uncertain and are not guaranteed and may fluctuate as a result of their dependence on theperformance of underlying assets or other variable market factors.CMBIGMrecommends that investors should independently evaluate particular investments or its affiliate(s) to whom it is distributed. This report is not and should not be construed as anoffer or solicitation to buy or sell any security or any interest insecurities or enter into any transaction.NeitherCMBIGMnor any of its affiliates, shareholders, agents, consultants, directors, officers or employees shall beliable for any loss, damage or expense whatsoever, whether direct or consequential, incurred in relying on the information contained in this report.Anyonemaking use of the information contained in this report does so entirely at their own risk. CMBIGMhas exerted every effort in its capacity to ensure, but not to guarantee, their accuracy, completeness, timeliness orcorrectness.CMBIGMprovidesthe information, advices and forecasts on an "AS IS" basis.The information and contents are subject to change without notice.CMBIGMmay issue otherpublications having information