Resilient 2021 Profits Following Housecleaning in First Half; Maintaining FVE at HKD 10.5

Narrow-moat Blue Moon reported 2021 results that missed our forecasts on revenue but met our estimates for net profit. We like the progress reported by management regarding the improvement in offline channel sales following reforms in first-half 2021 as well as efforts committed to diversify Blue Moon’s e-commerce presence. We think the latter is key to sustaining the growth rate for the online channel given the proliferation of new channels such as O2O, video streaming platforms and online fresh groceries apps. We maintain our fair value estimate of HKD 10.5 per share and think the company has returned to a growth trajectory after handling distributor channel reform and inventory issues last year.