Daiwa: CHINA RES BEER (00291) continues to expand its high-end brands, maintain "Buy" rating.

Daiwa released a research report stating that CHINA RES BEER (00291) management emphasized at a recent event that although overall beer consumption in the mainland is challenging, sales of its high-end brand Heineken have continued to record approximately 20% year-on-year growth in recent months, reflecting Heineken's continuously increasing share in the high-end market. The "Buy" rating is maintained. However, the bank believes that its sub-high-end brand Snow Draft may still come under pressure, due to weakening brand appeal and a relatively high reliance on the highly competitive catering channel, which has not yet stabilized. The bank noted that the group is rapidly launching new sub-high-end brands, but still needs channel investment to expand sales volume. On the cost side, aluminum prices in August rose 16% year-on-year and 3% month-on-month, while canned beer accounts for about 45% of CR Beer's products, so it faces certain cost pressure. The bank also mentioned that BUD APAC (01876) has a 12-month rolling cost lock-in policy, so its input cost pressure in the second half of the year is relatively smaller. The bank believes that before the Lunar New Year holiday in February next year, since all major beer companies are facing commodity cost pressure, it cannot be ruled out that the industry will raise prices across the board to pass costs on to retail customers.