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Weak consumer demand weighs on the beer market; target prices for several beer stocks have been lowered.
Release date:
2024-07-19
The report indicates that the mainland China beer market is facing headwinds in the short term, prompting the firm to lower its earnings forecasts for beer stocks for 2024–2026 by 1% to 11% to reflect subdued consumption trends. At the same time, it has cut CR Beer’s (00291) 12-month target price from HK$51 to HK$45, while maintaining a “Buy” rating and inclusion on its “Strong Buy” list. For the A-share listed Chongqing Brewery (600132.SH), the target price has been reduced to RMB 65.3, with a “Neutral” rating; for Tsingtao Brewery (00168) H-shares, the target price has been lowered from HK$74.5 to HK$67.1, with a “Buy” rating retained, and its A-share target price (600600.SH) has been trimmed to RMB 77.7, also assigned a “Neutral” rating. Meanwhile, Budweiser APAC (01876) maintains an unchanged target price of HK$13.3, with a continued “Buy” rating.
The report notes that dining‑out recovery in mainland China was sluggish in the second quarter, weighed down by adverse weather—particularly in coastal regions—and intense competition, with sales expected to be flat or decline by 9%. The firm forecasts that beer stocks will still post positive earnings growth in the first half of the year, ranging from 1% to 9%, driven primarily by ongoing product‑mix upgrades that have expanded gross margins.
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