China’s beer industry experienced a 2.3% year-over-year (YoY) decline in sales in October 2024, followed by a 5.7% YoY growth in November, according to a research report by Macquarie. The report highlighted that mid-market products were outpacing premium offerings in terms of sales performance.
However, the industry is facing challenges as it works through inventory destocking, which is expected to lead to weaker sales in December 2024. Macquarie has forecast that most Chinese beer companies will report a decline in sales for the fourth quarter of 2024.
Among the key players, Macquarie identified BUD APAC (01876.HK) as having the poorest sales performance, with a notable 21% drop in volume. In contrast, both TSINGTAO BREW (00168.HK) and CHINA RES BEER (00291.HK) are expected to see modest single-digit growth in average selling prices. Meanwhile, BUD APAC and Chongqing Brewery (600132.SH) may face greater pressure on their pricing.
Macquarie revised its target prices for several stocks: it lowered the target for CHINA RES BEER from $35 to $30.2 and for BUD APAC from $14.76 to $13.4. On the other hand, the broker raised TSINGTAO BREW’s target price from $60 to $78.4. Despite these changes, all three stocks maintain an “Outperform” rating.
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