Daily Investment Strategy
Recommended Stock：China Resources Beer（291）
Beer is typically seen as a summer beverage, closely associated with outdoor activities and social gatherings. When temperatures drop, outdoor activities decrease, and the frequency of social gatherings may also decline, which generally makes cold winters unfavorable for beer sales. However, according to predictions from the National Climate Center and several meteorological agencies, most regions in China are expected to experience higher temperatures than usual during this winter (from December 2024 to February 2025). Warmer temperatures could potentially benefit the sales of China Resources Beer. To recap, the group's revenue for 1H24 reached RMB 23.7bn. Although overall beer sales volume decreased by 3.4% yoy, sales of high-end products saw significant growth, with mid-range and above beers accounting for over 50% of total sales for the first time. This indicates that the company's premiumization strategy has been successful. China Resources Beer is actively deepening its "beer + liquor" dual empowerment business model and is intensifying efforts to control capital expenditures. The market expects that in 2025, China Resources Beer’s revenue and profit will grow by 4% and 11%, respectively. Target price: $32
PPI data higher than expected
The S&P 500 ended lower on Thursday as U.S. inflation data came in stronger than expected and U.S. Treasury yields climbed. Producer prices rose more than expected in November. After being raised to 0.3% in October, they rose 0.4% in November, higher than the expected increase of 0.2%. While the unexpected rise in PPI is not expected to affect expectations of a rate cut at next week's Fed meeting, it further highlights the need for a patient approach to monetary policy through 2025.
Hong Kong Stock Connect had a net outflow of HK2.92bn on Thursday of which Alibaba (9988) had the largest net inflow, reaching HK$1.04bn; followed by Xiaomi (1810). Tracker Fund (2800) recorded the largest net outflow at 4.12bn, followed by Tencent (700).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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