Mix upgrade continuing to drive growth
■ CRB announced that sales grew by 12.8% yoy to Rmb19.6bn and that reported net profit rose by 106% yoy to Rmb4.3bn in 1H21. Excluding the impairment loss from factory closures of Rmb205m and an Rmb1.75bn gain from the disposal of land assets, core earnings reached Rmb2.74bn, up 17% yoy, in line with our estimate.
■ We expect CRB’s sales in 2H21F to decline slightly by 2.5% yoy due to the Covid-19 situation in some areas in 3Q21, but expect the GPM to continue to expand yoy since the premiumization trend has not been affected by the Covid-19 situation.
■ Reiterate Add with a higher DCF-based TP of HK$79.