Lyon: Drink demand did not improve in August, and the beer industry lacks a catalyst in the short term

The Zhitong Finance App learned that Lyon released a research report saying that demand for beverages in China remained roughly flat month-on-month in August. The performance of Nongfu Spring (09633) continued to outperform its peers during the period. Sales of bottled water increased by about 2% year-on-year, and the growth rate slowed. Tea drinks maintained 15% to 20% growth, supported by strong momentum in unsweetened tea products; Master Kong (00322) beverage sales remained generally flat, and instant noodle shipments recorded an increase in the number of units; the unified (00220) beverage business continued to decline, while sales of instant noodles recorded an increase in the number of units.

In terms of operating costs, the price of PET, the main raw material, rose 27.3% year on year and 3.6% month on month in August this year. As of the 7th of this month, the price per ton reached 8,255 yuan, an increase of 41.8% over the same period last year. Lyon believes that Nongfu Spring is a leader in the beverage sector, giving it a “Highly Confident Outperform” rating.

In terms of the alcoholic beverage market, Lyon maintains a cautious view on the demand for liquor during the Mid-Autumn Festival. It is expected that only Maotai (600519.SH) and Wuliangye (000858.SZ) will record growth. As for the beer industry, Lyon pointed out that the summer season is nearing its end. Currently, beer sales are falling higher than expected. There is a lack of catalysts in the short term. Coupled with the 15.9% and 8.2% year-on-year increases in aluminum prices and barley in August, respectively, they gave Tsingtao Brewery (00168) and China Resources Beer (00291) a “outperforming the market” rating.