This year, both Hong Kong and A-share markets have experienced significant rallies, bringing a long-awaited bull market atmosphere, with many sectors including technology and biomedicine achieving substantial gains. However, market performance has been uneven. Compared to the exuberance in technology and biomedicine, the beer sector has appeared relatively sluggish.

Data shows that industry leader BUD APAC has gained 21.13% year-to-date, China Resources Beer has risen 11.88%, Pearl River Beer has climbed 8.64%, while Tsingtao Brewery has declined 6.47% and Chongqing Beer has fallen nearly 11%. Overall, many beer stocks have underperformed the Shanghai Composite and Hang Seng indices this year.

Notably, several listed beer companies have recently disclosed their 2025 mid-year results, showing divergent performance with some companies experiencing profit declines.

**Beer Stocks Show Mid-Year Performance Divergence, BUD APAC Profit Falls Over 24%**

Specifically, except for Pearl River Beer and ST Xifa, all other beer stocks in Hong Kong and A-share markets have disclosed their 2025 mid-year results. Data reveals that in the first half, BUD APAC experienced double declines in revenue and net profit attributable to shareholders, with net profit plummeting 24.40% year-on-year to $409 million USD, representing poor performance mainly due to a 6.1% volume decrease and 0.5% growth in revenue per hectoliter.

Additionally, Chongqing Beer and *ST Lanhuang also suffered declines in net profit attributable to shareholders in the first half.

On the other hand, China Resources Beer delivered strong mid-year performance, with net profit attributable to shareholders growing 23.04% year-on-year to RMB 5.789 billion, with profit growth significantly outpacing revenue growth. China Resources Beer achieved a historic high gross margin of 48.9% in the first half, up 2.0 percentage points year-on-year, primarily due to continued development of its beer business premiumization strategy and savings in raw material procurement costs. The beer business achieved a gross margin of 48.3% in the first half, up 2.5 percentage points year-on-year, mainly driven by premiumization and raw material cost benefits.

Beijing Yanjing Brewery Co.,Ltd. also delivered impressive first-half performance, with mid-year net profit attributable to shareholders increasing 45.45% year-on-year to RMB 1.103 billion, already exceeding its full-year 2024 results. According to the earnings report, Beijing Yanjing Brewery Co.,Ltd.'s beer revenue reached RMB 7.896 billion in the first half, up 6.88% year-on-year. In terms of volume, the company achieved sales of 2.3517 million tons in the first half, up 2.03% year-on-year, significantly higher than industry growth (China's above-scale beer enterprises' cumulative output fell 0.3% year-on-year in the first half), corresponding to a price per ton of RMB 3,357.50, up 4.75% year-on-year.

Furthermore, Tsingtao Brewery, San Miguel Beer Hong Kong, and other beer companies also achieved growth in net profit attributable to shareholders in the first half.

**How Do Institutions View Industry Prospects?**

Although beer stocks have shown relatively weak performance this year, several institutions have shared their views on the industry's development prospects.

Industrial Securities released a research report stating that looking ahead, the core consumer population will remain supported over the next five years, and beer industry consumption is expected to remain stable. Drawing from overseas experience and considering factors such as China's high-quality economic development, sufficient market depth from differential upgrade paces across regions, and higher pricing autonomy and upgrade potential from the high proportion of on-premise channels, Industrial Securities believes that beer premiumization remains the main medium- to long-term trend and competitive differentiator. Additionally, second-curve expansion exploration is expected to open up long-term growth potential.

GF Securities also recently released a research report stating that in the short term, monthly industry output growth rates provide strong guidance for beer index fluctuations, while quarterly performance reviews show that the second and fourth quarters are core investment windows for beer stocks. In the medium term, beer sector investment returns are better during inflation cycles. In the long term, attention should be paid to second-curve development.

GF Securities researchers noted that the beer industry's logic is currently shifting from supply-side to demand-side. Supply-side logic ensures stability of dividends and corporate profitability, making beer leaders attractive from a dividend yield perspective, while demand-side logic adds growth momentum to the industry, with opportunities coexisting between traditional large product launches and new flavor innovations.