Country's beer industry outlook for 2025: industry expects stable production, rising prices, decreasing costs, and increasing profit margins.

Recently, the Guotai Junan food and beverage team published a research report looking ahead to the beer industry market in 2025. The team stated that based on recent market research and Guotai Junan's calculations, they expect the beer industry sales volume in 2025 to be neutral in terms of prosperity, with the industry structure continuing to upgrade, costs continuing to decline, expenditure remaining stable, and the mid-term dividend payout ratio expected to increase. In terms of ton price, it is expected that in 2025, with the overall industry structure upgrading and the trend of shrinking volume in the low-end continuing, assuming the economic situation remains the same, the industry ton price is still expected to slightly increase, with the magnitude possibly narrower than in 2024. It is expected that the capital expenditure of various beer companies in 2025-26 may show a downward trend, with overall shareholder returns continuously strengthening. The expectation is for neutral sales volume prosperity, with the structure upgrade likely to continue. According to the research, Guotai Junan expects the industry sales volume in 2025 to slightly decrease to remain flat (the industry total is expected to decline by a low single digit in 2024). Guotai Junan predicts that in 2025, Tsingtao Brewery's sales volume target is relatively more positive, Yanjing's sales volume target is better than the industry average, Budweiser may face challenges in meeting its market share target, Reeb or will maintain the industry average, while China Resources Beer's target is relatively conservative. Costs are still in a downward cycle, with expenditure relatively stable. According to calculations, Guotai Junan predicts that raw material costs will still be in a downward cycle in 2025, with cost intensity possibly slightly narrower than in 2024. Guotai Junan predicts that barley prices will decrease year-on-year, glass bottles will remain stable with a slight decrease, paper boxes will remain stable, and aluminum cans will increase but with limited impact. In terms of competition, Guotai Junan predicts there may not be a vicious price war, and the trend of increasing industry profit levels will remain unchanged. In terms of expenditure, China Resources Beer may be the most cautious, Budweiser will remain stable, Qingdao Brewery, Yanjing, and others may focus on precise marketing in specific markets, improving cost-effectiveness. Guotai Junan believes that Yanjing is still in a period of supply-side improvement dividends, and Qingdao Brewery still has room for improvement in mid-term profit margins. The trend of increasing dividend payout ratio is starting, with shareholder returns continuously strengthening. According to discussions, Guotai Junan expects the overall dividend payout ratio level of the industry in 2025 to increase year-on-year. Guotai Junan predicts that Tsingtao Brewery and China Resources Beer are likely to continue to increase their dividend payouts in 2025-26, while Carlsberg and Budweiser may maintain their 2024 dividend levels in 2025, and Yanjing has room for improvement in mid-term dividend payout ratio. Risk warnings: cost fluctuations, extreme weather impacts, changes in consumer habits.