Bernstein: APAC Food & Beverages — China Beer May Update; Heineken Rapidly Accelerating While Budweiser Languishes
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Bernstein's May update on the Chinese beer market reveals accelerating momentum for the Heineken brand, driven by China Resources Beer's (CR Beer) extensive distribution network, while Budweiser continues to lose market share. Heineken's volumes surged roughly 30% year-over-year in May, supported by proactive summer promotions and expanding distribution. In contrast, Budweiser volumes declined approximately 5%.
CR Beer's overall volumes grew about 5%, with Heineken contributing the majority of incremental gains. Heineken's penetration rate within CR Beer's distribution channels increased from 60% at the beginning of the year to 75% by May. Conversely, Budweiser's share in premium on-premise channels dropped from 35% to 30%.
Tsingtao Beer experienced flat year-over-year volume growth, as decelerating premium product expansion and cost pressures offset pricing benefits. Industry-wide May volumes grew approximately 2%, maintaining the ongoing premiumization trend. The top five brewers now collectively hold over 80% of the market share.
Bernstein maintains an Outperform rating on CR Beer (291.HK) with a target price of HK$45, citing Heineken's accelerating growth trajectory and structural gross margin improvements. For Tsingtao Beer (168.HK), the firm retains a Market-Perform rating with a target price of HK$55, citing a lack of near-term catalysts and subdued growth expectations. Bernstein projects Heineken's sales volume in China to exceed 1 million kiloliters by 2026.
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