Bank of America Securities has issued a research report maintaining a "Buy" rating on CHINA RES BEER (00291) with a target price of HK$35.6, citing three key reasons. First, CHINA RES BEER continues to expand its market share by actively responding to channel fragmentation and diversified consumer demand. Second, the stock has significantly underperformed in China's consumer goods sector over the past six months, and with short-term uncertainties now resolved, a catch-up in share price is anticipated. Third, three catalysts are seen potentially driving a valuation reassessment in the second quarter: a possible recovery in the food and beverage channel, the seasonally strong second quarter, and the World Cup in June. The firm plans to review earnings forecasts after the final results are announced. Concerns over potential goodwill impairment had been a major uncertainty during the current downturn in the baijiu cycle, but the profit warning from CHINA RES BEER is viewed as an event that clears these doubts. The impairment amounts to approximately 40% of the RMB 7 billion goodwill related to the Jinsha acquisition, which is larger than expected. Whether further impairments will be recorded in 2026 depends on the fundamentals of the baijiu business. For now, the bank believes the amount has been accounted for under prudent assumptions. CHINA RES BEER’s core beer business remains healthy, with revenue and net profit attributable to shareholders expected to grow by low single digits and over 10% year-on-year in 2025, respectively. Channel checks indicate that among China’s top three brewers, CHINA RES BEER is likely the only one to have achieved positive volume growth year-to-date in 2026. The non-cash impairment is not expected to affect dividends, and the dividend payout ratio for 2025 is projected to be higher than the 52% recorded in 2024.