Blue Moon Earnings: Loss Narrowed Sequentially as Promotions Reduced, Raising Valuation by 4%

We raised our fair value estimate for narrow-moat Blue Moon by 4% to HKD 2.65 per share, after the firm delivered a 2024 pretax loss that was 12% better than our estimate. We view this result positively as operating expenses were lower than expected. Hence, we increased our 2025 earnings forecast by 17% , as we reduced our administrative expenses ratio estimate for 2025. However, our longer-term forecasts are largely unchanged. Our valuation implies a 41 times 2025 price/earnings ratio and a dividend yield of 3.6%. We think the shares are currently overvalued as Blue Moon is still facing challenges in balancing sales growth with controlling promotional expenses.