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CHINA RES BEER(291)
Analysis：
Despite facing increased uncertainties and a continuously evolving consumer market, China Resources Beer (291) achieved a beer sales volume of approximately 6,487,000 kiloliters in the first half of 2025, up 2.2% year-on-year, with a record-high net profit of RMB 5.789 billion, up 23% year-on-year. The group’s premium beer products continued to perform strongly, with mid-to-high single-digit growth in sales volume for sub-premium and above beers, and over 10% year-on-year growth for premium and above beers. Notably, “Heineken” achieved over 20% sales growth despite a high base last year, “Lao Xue” saw sales surge by over 70% year-on-year, and “Amstel” doubled its sales compared to the same period last year.
The group’s total revenue in the first half of 2025 reached RMB 23.942 billion, up 0.8% year-on-year. Beer business revenue grew by 2.6% to RMB 23.161 billion, driven by continued premiumization, which led to a 0.4% increase in average selling price and savings in raw material procurement costs. This pushed the beer business gross margin up by 2.5 percentage points to 48.3%, while the overall gross margin rose by 2 percentage points to a record high of 48.9%. The group continued to optimize its production capacity layout, ceasing operations at two breweries in the first half. By the end of June 2025, the group operated 60 breweries in China with an annual production capacity of approximately 19,200,000 kiloliters. In terms of new product launches, the group actively embraced new consumer trends, introducing products such as German wheat beer, tea-infused beers like Huangshan Maofeng and Xinyang Maojian, fruit beers, highland barley beer, and Hainan beer to meet personalized and differentiated consumer demands. It also launched the premium product “Ken 14,” developing a new category using Chinese-grown barley. In new consumption channels, the group’s online business grew rapidly, leading the industry. It established strategic partnerships with platforms such as Alibaba, Meituan Flash Purchase, JD.com, Ele.me, and Waima Songjiu, with online and instant retail businesses achieving nearly 40% and 50% year-on-year growth in gross merchandise value (GMV), respectively. Additionally, the group explored new business models, actively promoting rapid growth in customized and OEM businesses.
In the baijiu (white spirit) business, amid deep industry adjustments, the group recorded revenue of RMB 781 million in the first half of 2025, with the flagship product “Zhaiyao” contributing nearly 80% of the baijiu business revenue. The gross margin remained stable, with EBITDA of RMB 218 million. Looking ahead, as the baijiu industry shifts from extensive to refined growth, from quantity to quality, and from high-speed to high-quality development, the group will actively pursue price restructuring and stricter cost control. In terms of products, it will focus on developing “Zhaiyao,” “Jinsha,” and unpackaged products, promoting consumption in settings like banquets and leveraging the established beer business distribution network to expand coverage and sales of mid-range and unpackaged products, aiming for improved sales in the second half. (I do not hold the aforementioned stock.)
Strategy：
Buy-in Price: $27.80, Target Price: $30.50, Cut Loss Price: $26.50
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DMALL(2586)
Analysis：
In H1 2025, the company reported revenue of RMB 1.078 billion, a year-on-year increase of 14.8%; net profit was RMB 62 million, turning a loss into profit compared to the same period last year; non-IFRS net profit was RMB 77 million, up 152.5% year-on-year. The gross profit margin stood at 38.38%, and the net profit margin was 5.77%, indicating a significant improvement in profitability.
The company’s core business is divided into AI Retail Core Solutions and AI Retail Value-Added Services. In the first half of 2025, these segments generated revenues of RMB 488 million (up 16.2% year-on-year) and RMB 591 million (up 13.7% year-on-year), accounting for 45.2% and 54.8% of total revenue, respectively. The AI Retail Core Solutions business secured new benchmark clients such as Shanghai Tangjiu (Group) Co., Ltd and Xinjiang Wuika Times while deepening cooperation with existing clients like Pang Donglai and Lawson. The net revenue retention rate reached 107%, reflecting strong stickiness in the SaaS business.
Given the company’s extensive retail client base, which has significant cross-border procurement and local retail payment needs, stablecoin payment methods are expected to substantially reduce costs and improve efficiency. The company is actively pursuing a stablecoin license application and remains optimistic about the development of cryptocurrencies. The upcoming Bitcoin Asia Summit in late August is anticipated to boost the stock prices of related cryptocurrency companies. In the long term, we believe DMALL has growth potential, and its profitability is expected to strengthen.
Strategy：
Buy-in Price: $10.80, Target Price: $12.38, Cut Loss Price: $10.16
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Great Star Industrial (002444.CH) - Breakthrough in Power Tools
Company profileThe Company was established in 1993, starting with OEM of hand tools. In 2009, it launched its first proprietary brand, Workpro, and began transitioning from original design manufacturer (ODM) to original brand manufacturer (OBM). At the same time, it continued overseas acquisitions to expand its brand portfolio, driving continuous growth in scale. Currently, the Company's products are mainly targeted at Europe and the United States. In 2024, overseas revenue accounted for 95%. Its products mainly include hand tools, power tools and industrial tools, with revenue of RMB10.07 billion (RMB, the same below), RMB1.44 billion and RMB3.23 billion, respectively. Among them, OBM and ODM revenue accounted for 47.92% and 51.67%. Investment SummarySteady Growth in Results
In 2024, the Company achieved revenue of approximately RMB14.80 billion, up 35.37% yoy; net profit attributable to the parent company of RMB2.30 billion, up 36.18% yoy; and a gross margin of 32.01%. Over the past five years since 2019, revenue and net profit have recorded an average growth rate of 17.5% and 20.6%, respectively.
On July 10, the Company issued a result forecast, expecting H1 2025 net profit attributable to the parent company to be RMB1.25-1.37 billion, representing an estimated increase of 5%-15%; net profit attributable to the parent company excluding non-recurring items is expected to be RMB1.27-1.39 billion, up approximately 5%-15%, equivalent to a Q2 net profit attributable to the parent company growth midpoint of 9.2%, better than market expectations.
Although U.S. tariffs negatively impacted production capacity utilization for approximately 40 days in Q2, affecting order delivery and revenue, it is expected that Q2 revenue compared with the same period last year remained almost the same. However, the Company improved its gross margin through cross-border e-commerce sales and increased sales of new products, particularly power tools. As a result, Q2 net profit attributable to the parent company is expected to grow, demonstrating strong growth potential. Breakthrough in Power Tools
According to Frost & Sullivan, from 2022 to 2026, the global CAGR for power tools will exceed 6%, while the CAGR for hand tools will be 3%-4%, with powered products significantly outperforming non-powered ones. Since 2021, the Company has positioned power tools as a strategic business, and in 2024 achieved breakthroughs in 20V lithium battery tools in mainstream markets. It subsequently announced two major international retail customer orders for lithium battery power tools and related accessories, with total annual procurement values equivalent to no less than USD30 million and USD15 million, respectively. Notably, the first order required production and delivery in Vietnam for the U.S. market, marking the Company's first power tool order produced and delivered outside China, and validating its global supply capabilities with top-tier clients. The second order, from Europe, marked the Company's debut in the European power tools market. Global Capacity Layout to Respond Quickly to Market DemandSince 2018, the Company has accelerated its overseas capacity layout through self-built plants in Southeast Asia and acquisitions in Europe and the U.S. Currently, it operates 23 production bases worldwide, including 11 in China, 3 in Southeast Asia, 6 in Europe, and 3 in the U.S. The global supply chain system not only improves responsiveness to sudden market demands but also strengthens resilience against global trade barriers. In Q2 2025, due to the impact of the U.S. "Reciprocal Tariffs" policy, production capacity was restricted for about 40 days, significantly affecting order delivery and revenue. However, with the Vietnam production base, the Company partially avoided tariff risks. Now, the third phase of the Vietnam base is already in operation, and the fourth phase is under construction, with full coverage of Southeast Asia's shipments to the U.S. expected by the end of 2025. This arrangement reduces cost pressures from China-U.S. trade frictions and lays a solid foundation for future growth. In addition, the 20% tariff agreement between Vietnam and the U.S., which is lower than China's export tariff to the U.S., will help further consolidate the Company's competitiveness in global markets. Investment ThesisThe Company's revenue is concentrated in Europe and the U.S., and in the future, it will leverage capacity relocation to establish a complete trade chain of "R&D in China -- Manufacturing in Southeast Asia -- Sales in Europe and the U.S." We are optimistic about the long-term development of the Company and expect EPS to be 2.04/2.62/3.26 yuan respectively for 2025/2026/2027. We offer a target price of 39.4 yuan, respectively 19.3/15/12.1x P/E for 2025/2026/2027, and an "Accumulate" rating. 
Risk Factors1) Progress of new production line is below expectations;
2) Electric power tools sales fall short of expectations;
3) Macroeconomic downturn affects product demand;
4) Sharply rising raw material prices or sharply falling product prices. Financial Data
(Closing price as at 14 August 2025) Download PDF Version Here...
| Recommendation on 22-8-2025 | | Recommendation | Accumulate (Initiation) | | Price on Recommendation Date | $ 34.620 | | Suggested purchase price | N/A | | Target Price | $ 39.400 |
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