Citi has issued a research report indicating that CHINA RES BEER (00291) achieved a core net profit of RMB 5.724 billion in 2025, representing a 20% year-on-year increase, which was 11% higher than the bank's forecast. This was primarily driven by strong performance in the beer business during the second half of 2025. During the period, beer EBIT and EBITDA saw year-on-year growth of 2.4 times and 44%, respectively, demonstrating the strength of the beer operations. The bank has raised its target price for CHINA RES BEER from HK$38 to HK$39.8, reaffirming the stock as the preferred choice in the Chinese beer sector and maintaining a "Buy" rating. The report stated that management has observed a gradual recovery in China's mass dining channels from the second half of 2025 to the first quarter of 2026, with expectations that this trend will continue into the peak beer consumption season in the second quarter. Citi anticipates that the group's beer sales volume will increase year-on-year in 2026, average selling price for beer will rise annually, beer gross margin will remain largely stable, and beer operating profit margin will grow by 30 basis points year-on-year. Regarding the baijiu business, Citi expects a 5% year-on-year decline in sales for 2026, with EBIT losses narrowing by approximately 2% year-on-year. CHINA RES BEER plans to further enhance shareholder cash returns, aiming to increase the dividend payout ratio (excluding one-off items) from 53% in 2025 to a future range of 60% to 70%. The bank has raised its core net profit forecasts for CHINA RES BEER for the current and next year by 9% and 7%, respectively, reflecting better-than-expected beer business growth in the second half of 2025. It is projected that beer business sales will grow by 5% in the 2026 fiscal year, while baijiu business sales will decline by 5% year-on-year, with EBIT losses narrowing by about 2%.