The characteristics of the next phase of the Beer industry will be: national brands maintaining a relatively stable high level of profitability, and regional brands further improving their net margin, with leading companies continuously increasing their dividend rates.
According to GTJA's Research Reports, looking ahead to 2025, the characteristics of the next phase of the Beer industry will be: national brands maintaining a relatively stable high level of profitability, and regional brands further improving their net margin, with leading companies continuously increasing their dividend rates. It is expected that from 2025 to 2026, the dividend rates of Qingdao Beer and China Resources will gradually rise from 64% and 58% to 60-70%+, respectively. Yanjing Beer is expected to gradually improve, Chongqing Beer may maintain 100% dividends, and Budweiser may maintain over 82%. The overall competitive situation in the Beer industry will not significantly intensify; leading companies Budweiser, China Resources, and Chongqing Beer may still prioritize profit assessment in 2025 and will not participate in vicious competition. Among the regional leaders, Zhujiang focuses on Guangdong, while Yanjing's regional penetration is primarily led by high-end single products.
GTJA's main opinions include:
The industry is entering a high-dividend era, and is expected to show strong profitability resilience.
Since the peak sales of the beer industry in 2014, it has experienced stages of supply-side capacity reduction, increased market share for leading brands, price increases through structural upgrades, and improved profit margins. Profitability and valuation have risen across the board. However, since the second half of 2023, due to the decline in inflation levels, the logic of price increases has been challenged, leading to a drop in valuations to historical lows of around 20 times. Nevertheless, the profitability level of the sector continues to reach new highs, with the net margin in the third quarter of 2024 increasing by 0.16 percentage points to 13.1%, highlighting the advantages of the business model and profitability resilience.
GTJA believes that the characteristics of the next phase of the Beer industry will be: national brands maintaining a relatively stable high level of profitability, and regional brands further improving their net margin, with leading companies continuously increasing their dividend rates. It is expected that from 2025 to 2026, the dividend rates of Qingdao Beer and China Resources will gradually rise from 64% and 58% to 60-70%+, respectively. Yanjing Beer is expected to gradually improve, Chongqing Beer may maintain 100% dividends, and Budweiser may maintain over 82%.
The economy is expected to experience marginal recovery, with long-term structural upgrades and category expansion continuing.
Due to relatively weak consumer scenes such as Dining, it is estimated that the industry sales in 2024 may decline by about 3% year-on-year, with a ton price increase of 1-2% year-on-year. With more proactive policies and the issuance of dining consumption vouchers in many places, the recovery of Dining and other scenes in 2025 is expected to bring a rebound in volume and price trends. Combined with the low base effect, the growth rate of sales from Q4 2024 to Q3 2025 is expected to improve quarter-on-quarter, with ton price increases likely to exceed CPI increases, and the long-term structural upgrade trend remaining unchanged.
It is expected that from 2025 to 2026, Budweiser (01876) may focus on ultra-high-end upgrades, with the possibility of a slight price increase for some products; China Resources (00291) will insist on a dual-driven strategy of "white + beer" and high-end diversification; Qingdao Beer (00168) will focus on developing pure draft and flavor innovations based on the classic 8 yuan; Chongqing Beer (600132.SH) will lead or initiate beverage track layout plans under the "Sailing 27" initiative; Yanjing (000729.SZ) U8 will maintain rapid growth driven by product line refinement and regional penetration; Zhujiang (002461.SZ) will continue to grow due to the advantages of its regional market benefiting its pure draft. In the medium to long term, leading beer companies may expand their categories, with contributions from the beverage, Spirit, and Other business lines gradually increasing.
The competitive situation is mild, costs are stable with declines, and gross margins may reach new highs.
GTJA believes that the overall competitive situation in 2025 will not significantly intensify, with leading companies like Budweiser, China Resources, and Chongqing Beer likely to focus primarily on profit assessment without participating in vicious competition. Among the regional leaders, Zhujiang focuses on Guangdong, while Yanjing's regional penetration is mainly led by high-end single product momentum. A price range of 6-8 yuan has formed a brand monopoly advantage, while products priced above 10 yuan are driven by innovation rather than low-price competition. Yanjing and Zhujiang contributed to 70% of the industry's profit increment from January to September 2024, mainly benefiting from their industry phase, regional channel advantages, and internal cost reduction and efficiency improvements, which are expected to continue. It is believed that the trend of regional differentiation will continue, while the recovery of national leaders under the industry's improvement is worth looking forward to, and Qingdao Beer may achieve market share recovery under the drive of organizational innovation in 2025. On the cost side, it is predicted that barley costs may decline by mid-to-high single digits year-on-year in 2025, with stable prices for glass bottles and cartons, and the leading companies' gross margins are expected to increase slightly.
Risk warning: cost fluctuations, extreme weather impacts, changes in consumer habits.
