Company Coverage
Tsingtao Brewery (168 HK): 2Q26: Net Profit In Line; Sales Volume Down 7% With Flat ASP
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$42.86
HK$62.40
+45.6%
HK$66.70
Analyst
Analyst
Highlights
- Tsingtao Brewery’s 2Q26 earnings were in line with consensus estimates.
- In 2Q26, beer sales volume was 23.0m hl (-7% yoy). By brand, sales volume of the Tsingtao brand/secondary brand was 13.3m hl/9.7m hl (-1%/-14% yoy), respectively. By category, sales volume of mid-range to high-end/other products was 10.0m hl/13.0m hl (+2%/-13% yoy), respectively.
- Product mix continued to improve yoy, with mid-range to high-end products accounting for 44% of 2Q26 sales volume (vs 40% in 2Q25). However, ASP remained largely flat yoy. Maintain BUY, cut target price by 6% to HK$62.40.
Analysis
- 2Q26 net profit in line. Tsingtao Brewery reported 1H26 revenue of Rmb19,655m (-4% yoy). Gross margin was 44.9% (+1.2ppt yoy). EBIT
totalled Rmb4,808m (+4% yoy), and EBIT margin was 24.5% (+1.8ppt yoy). Net profit was Rmb3,920m (flat yoy), in line with VA consensus. Net margin was 19.9% (+0.9ppt yoy).
- This implies that in 2Q26, revenue was Rmb9,370m (-7% yoy). Gross margin was 47.2% (+1.4ppt yoy), supported by a 2% yoy decline in unit COGS. EBIT was Rmb2,605m (+1% yoy), and EBIT margin was 27.8% (+2.1ppt yoy), driven by: a) gross margin expansion; and b) a 0.9ppt decline in selling expenses, partially offset by a 0.2ppt increase in administrative and R&D expenses. Net profit was Rmb2,120m (-3% yoy), and net margin was 22.6% (+0.8ppt yoy).
Highlights
- Tsingtao Brewery’s 2Q26 earnings were in line with consensus estimates.
- In 2Q26, beer sales volume was 23.0m hl (-7% yoy). By brand, sales volume of the Tsingtao brand/secondary brand was 13.3m hl/9.7m hl (-1%/-14% yoy), respectively. By category, sales volume of mid-range to high-end/other products was 10.0m hl/13.0m hl (+2%/-13% yoy), respectively.
- Product mix continued to improve yoy, with mid-range to high-end products accounting for 44% of 2Q26 sales volume (vs 40% in 2Q25). However, ASP remained largely flat yoy. Maintain BUY, cut target price by 6% to HK$62.40.
Analysis
- 2Q26 net profit in line. Tsingtao Brewery reported 1H26 revenue of Rmb19,655m (-4% yoy). Gross margin was 44.9% (+1.2ppt yoy). EBIT
totalled Rmb4,808m (+4% yoy), and EBIT margin was 24.5% (+1.8ppt yoy). Net profit was Rmb3,920m (flat yoy), in line with VA consensus. Net margin was 19.9% (+0.9ppt yoy).
- This implies that in 2Q26, revenue was Rmb9,370m (-7% yoy). Gross margin was 47.2% (+1.4ppt yoy), supported by a 2% yoy decline in unit COGS. EBIT was Rmb2,605m (+1% yoy), and EBIT margin was 27.8% (+2.1ppt yoy), driven by: a) gross margin expansion; and b) a 0.9ppt decline in selling expenses, partially offset by a 0.2ppt increase in administrative and R&D expenses. Net profit was Rmb2,120m (-3% yoy), and net margin was 22.6% (+0.8ppt yoy).
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$42.86
HK$62.40
+45.6%
HK$66.70
Analyst
Analyst
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