Galaxy Securities: Peak Season Resonates with World Cup, Optimistic about Craft Beer and Regional Brand Expansion.

Galaxy Securities released a research report stating that the peak season and the World Cup are resonating, and they are optimistic about the expansion of craft beer and regional brands. The beer sector has resilient operations, with a year-on-year increase of +1% in revenue and +27% in net profit attributable to shareholders in the combined 25Q4 and 26Q1. They are optimistic about the pricing power of the beer industry. Currently, the prices of aluminum cans have seen a significant year-on-year increase, as have barley and glass prices. It is expected that the trend of price increases will continue in the second half of 26, but the beer industry can offset this through measures such as optimizing product structure and reducing promotion costs. Referencing the cost increase cycle since 2017, the beer industry has maintained profitability. In the short term, attention is focused on the peak season and the World Cup catalyzing factors. On one hand, the hot weather in China from June to August is favorable for beer consumption, and on the other hand, the World Cup in June and July may drive the recovery of dining and self-drinking scenarios. Galaxy Securities recommends selecting segmented directions with excess returns: 1) craft beer, as the industry is in a period of high-speed growth, the leading brand in the segmented category, Golden Star Beer, is expected to fully benefit from the expansion of the industry with its differentiated products and flexible channel strategy; 2) regional brand expansion, focusing on FuJian YanJing HuiQuan Brewery (600573.SH), which is expected to benefit from the relaxed competitive landscape in the Fujian market, the rejuvenation of internal management, and the surge in sales of the 1983 flagship product, with the dual logic of market share improvement and profitability enhancement.