HK Stock Market Move | Beer stocks rose in late trading; Q3 sentiment was relatively weak, with improvement expected in Q4; institutions say pessimistic expectations for beer have been largely priced in.

Beer stocks rose in late trading. As of press time, CHINA RES BEER (00291) rose 4.17% to HK$20.74; BUD APAC (01876) rose 3.25% to HK$6.19; TSINGTAO BREW (00168) rose 2.39% to HK$41.08. On the news front, the beer sector's Q3 reports show relatively weak sentiment in the Q3 peak season. In the single quarter, Tsingtao Brewery's sales volume fell 9.1% year-on-year and revenue per ton rose 3.9% year-on-year; Beijing Yanjing Brewery did not disclose overall sales volume, but sales volume of its core flagship product U8 surged 38% year-on-year; Chongqing Brewery's sales volume fell 9.6% and its per-ton price was basically flat year-on-year; Guangzhou Zhujiang Brewery's sales volume fell 2.3% year-on-year and revenue per ton rose 2.3% year-on-year. Sinolink believes that the earlier decline in fundamental expectations has led to a notable downward revision in the sector's valuation, and the market has already priced in concerns about brewers' subsequent costs/profits. Guotai Haitong said that pessimistic expectations for beer have been reflected relatively fully. Guosheng said that beer is currently gradually entering the off-season, and we expect that in 26Q4, supported by a low base, beer consumption scenarios are expected to improve in line with the trend.