高盛-中国啤酒行业上半年回顾20240716

16July2024|5:25PMHKT

ChinaBrewing

1H/2Q24Preview:N-Theadwindstobeerconsumption;MixUpgradestillholds;BuyCRB,BudAPAC,Tsingtao-H

WehavereceivedquiteanumberofinvestorinquiriesonrecentweaknessinChina

LeafLiu

+852-3966-4169|leaf.liu@

beernames.Overallwenotetheweakcateringrecoveryin2Qtogetherwith

GoldmanSachs(Asia)L.L.C.

negativeweatherimpactespeciallyincoastalarea(seeBudAPAC2Qpreview)and

HongdaZhong

+852-2978-2300|

toughcompshaveledtoN-Tvolumeweakness,(-7%~+2%volumein1Hand

hongda.zhong@

GoldmanSachs(Asia)L.L.C.

-9%~0%in2QonGSE).Thatsaid,for1H/2Q24westilllookforpositiveearnings

JuliaMu

growth(1~9%NPgrowthin1H)amongbrewersonmarginexpansionwith

+852-2978-1219|julia.mu@GoldmanSachs(Asia)L.L.C.

continuedmixupgradeefforts(1%~2%ASPgrowth)despitepersistentfoodprice

ValerieZhou

deflationYTD(link),whilewealsofactorintheweakconsumptiontrend.Allin,welowerourearningsestimatesforBrewersby1%~11%in2024~26Eand4%~11%

+852-2978-0820|valerie.zhou@GoldmanSachs(Asia)L.L.C.

forBairun.

Into2H24,welookforreboundinvolume/earningsgrowth(GSE10~59%

recurringNPyoygrowthin2H)withpotentialfor:1)sequentialimprovementinbeerconsumptionintothesummer,withpotentiallymoreoutdoorgatheringsamidupcomingsportseventsin3QwithimprovingweatherconditionsinSouthernChina,whilethecomparisonbaseisalsolower;2)continuedmixupgradeforSKUswithastrongproductcycle/channelcapability:eg.salesvolumeofHeinekenstillsawDD%growthin1H24despitetheweakconsumptiontrend;3)regionalupgradesin

_

under-penetratedareas(seeExhibit6forregionalbeerbrandsZhujiang/Yanjingthatreportedstrong1H/2Qpre-results);4)continuedcosttailwindsandmoredisciplinedinvestmentafter2Qfront-loading;5)potentialupsidefromshareholderreturnor

capitalallocation.

Westillforecast2024-26earningsCAGRsat8~15%,lookingforgradualrecoveryinon-premiseconsumptiondrivingcontinuedmixupgrade.ForCRB,wethinkit

deliveredstronger-than-peerpremiumgrowthin1Hwhileitsmarketingexpenseisabitmorefrontloadedwithsportseventsin2Q,andwelookforsequential

improvementin2H24,expectingrevenue/recurringEBITtorise5%/46%yoywithteens%growthinthevolumeofpremiumproduct.Valuationwise,ChinaBrewersarenowtradingatc.13X-18X2025P/EforH-shareandc.20xforA-share,with

dividendyieldsat3%-5%,whileChinabrewers’weightedaverageP/Eisata13%discounttoglobalbrewers.

GoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthis

report.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto

/research/hedge.html.Analystsemployedbynon-USaffiliatesarenotregistered/qualifiedasresearchanalystswithFINRAintheU.S.

GoldmanSachsChinaBrewing

Reflectingthesechanges,welowerourearningsestimatesbyupto11%.Asaresult,wereviseour12mTPforCRBtoHK$45(vs.HK$51prior),forChongqingtoRmb65.3(vs.Rmb69.5prior),Tsingtao-A/Tsingtao-HtoRmb77.7/HK$67.1(vs.Rmb86.2/HK$74.5prior).OurtargetpriceforBudAPACremainsunchangedatHK$13.3fromourlatest

2Q24preview.WecontinuetopreferBuy-ratedCRBeer(onCL),BudAPACandTsingtao-H.

Exhibit1:SummaryofTP/earningschangesandvaluations

TargetNew

-12% 0%-10%-10% -6%-11%

*denotesthestockisontheAPACConvictionList;TPsarebasedona12-monthtimeframe.ExityearP/Eis2026E,whichwethendiscountbackto2024ateachcompany’scostofequity

Company

CRB

BUDAPAC

Tsingtao-HTsingtao-AChongqingBairun

NPCAGR

24-26

15%13%8%8%8%11%

Ticker

0291.HK

1876.HK

0168.HK

600600.SS

600132.SS

002568.SZ

Price

12-Jul-2024

27.95

9.99

51.90

70.39

62.83

16.31

Divyield2024e

3.6%4.1%4.9%3.4%4.4%2.6%

Implied2026e

12X

15X

12X

17X

18X

16X

Target2024e

24X

25X

18X

22X

22X

23X

ExitP/E

23X

23X

18X

23X

23X

23X

Ratings

Buy*

Buy

Buy

NeutralNeutralNeutral

2026e

19X

19X

15X

19X

18X

19X

2024e

15X

18X

14X

20X

21X

20X

2025e

13X

16X

13X

19X

19X

18X

2025e

21X

22X

16X

20X

20X

21X

45.00

13.30

67.10

77.70

65.30

18.70

51.00

13.30

74.50

86.20

69.50

21.00

61%33%29%10% 4%15%

Price

Change

CurrentPrice

PriceImplied

Upside

Old

Source:Datastream,GoldmanSachsGlobalInvestmentResearch

_

16July20242

GoldmanSachsChinaBrewing

Industrytrend

Wenotetherainy/colderthanusualweatherconditionsesp.inSouthChinaandchoppycateringchannelrecoveryYTDhaveimpactedbeerconsumptiondemandin2Q,andweestimatesomesequentialdeclinesinvolumeforChinabrewersin2Q24(seeour

MonthlytrackerinExhibit8),whilethemixupgradecontinuesamidweather/macro

impact.BasecompsaresequentiallyeasingintoJuneandthesummerpeakseason,

offeringpotentialgrowthupsidein3Q.Westillexpectpremiumbeervolumegrowthat

8%CAGRin2024~26E,outpacingthe6.0%/5.4%yoyconsumerexpenditurein

2024/25EperourMacroteam,drivingourbeerindustryoutlookfor3.4%retailsalesvalueCAGRwith3.5%ASPCAGRin2024-26E.

Exhibit2:Welookfor2.8%/3.7%/3.4%ASPgrowthin2024E-26E,drivingoverallindustrygrowth,offsettingslightvolumedeclinesovertime

Beerindustryvolumegrowthvs.ASPgrowth

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024E

2025E

2026E

6.4%

1.9%1.7%

4.5%

5.3%-0.4%

5.0%

4.3%

-2.8%

3.9%0.2%

3.7%3.4%-0.1%-0.2%

3.7%

2.8%

2.7%-0.7%

2.8%-1.5%

0.5%

-1.2%

-4.2%-4.4%

-7.0%

10%8%6%4%2%0%-2%-4%-6%-8%

VolumeYoYASPgrowthYoY

Exhibit3:WebelievepremiumizationwillcontinuetobethedriveroftheASPoftheChinabeerindustry

Marketsharebyvolume

Marketsharebyvolume

100%

90%

VolCAGRinred

-5%

32%

-5%

37%

80%

48%

70%

Mass&others(<Rmb10/litre)

Mid(Rmb10-18/litre)

60%

33%

-1%

50%

34%

3%

40%

33%

Premium(>Rmb18/litre)

30%

8%

35%

20%

28%

15%

19%

10%

0%

202020232026E

Source:GoldmanSachsGlobalInvestmentResearch,NBSSource:GoldmanSachsGlobalInvestmentResearch,NBS

Exhibit4:Monthlybasecompsaresequentiallyeasinginto3Q24Exhibit5:Onayoybasis,beervolumeinMaysequentially

improvedbutstillindeclineyoy

_

Jan+Feb

2.1%

-0.3%

4.0%3.0%2.0% 1.0%0.0%-1.0%-2.0%-3.0%-4.0%

BeerIndustryVolumeCAGRvs.2019

2023CAGRvs.2019

2024CAGRvs.2019

3.1%

2.0%1.1%

-0.3%

1.7%

0.4%

0.0%0.1%

-1.3%

-1.7%

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

-2.8%

Nov

Dec

-2.7%-2.8%

25.0%20.0% 15.0% 10.0% 5.0% 0.0% -5.0%-10.0%-15.0%-20.0%

BeerIndustryVolumeyoy

20.4%12.1%

-1.2%

-6.5%

21.1%

7.0%

-4.5%

-9.1%

2023

1.6%

-3.4%

-5.8%

2024

0.4%

-8.0%

-10.6%

-15.5%

Jan+Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source:NBS,DatacompiledbyGoldmanSachsGlobalInvestmentResearchSource:NBS,DatacompiledbyGoldmanSachsGlobalInvestmentResearch

16July20243

GoldmanSachsChinaBrewing

Exhibit6:Continuedregionalpremiumizationwithsmallerregionalbeerbrandsreportingstrong1H/2Qpreresults

*mid-endtopremiumsegmentrevenuegrowth.Source:Companydata

_

16July20244

GoldmanSachsChinaBrewing

Exhibit7:Premiumizationcross-companycomparison:westillexpectCRBtodeliverhighestgrowthforpremiumvolumein2023-26

CRB

BudAPACChina

Tsingtao

Chongqing

Premiumization

Premiumvolume(000kl)

2021

1,866

2,865

2,150

1,212

2022

2,102

2,620

2,247

1,382

2023

2,500

3,105

2,483

1,437

2024E

2,783

3,138

2,515

1,473

2025E

3,083

3,393

2,621

1,547

2026E

3,373

3,639

2,700

1,609

Premiumvolumeas%oftotal

2021

17%

39%

27%

43%

2022

19%

37%

28%

48%

2023

22%

42%

31%

48%

2024E

25%

45%

32%

48%

2025E

28%

49%

33%

49%

2026E

30%

52%

34%

49%

Premiummarketshare

2021

22%

34%

25%

14%

2022

24%

30%

26%

16%

2023

25%

31%

25%

14%

2024E

26%

29%

24%

14%

2025E

27%

29%

23%

13%

2026E

27%

30%

22%

13%

Premiumvolume2021-23CAGR

16%

4%

7%

9%

Premiumvolume2023-26CAGR

10%

5%

3%

4%

TotalVolume(000kl)

2021

11,056

7,314

7,930

2,789

2022

11,096

7,094

8,072

2,857

2023

11,151

7,399

8,007

2,998

2024E

11,001

6,985

7,830

3,064

2025E

11,055

6,985

7,863

3,178

2026E

11,106

6,999

7,862

3,276

Note:ChongqingchangeddefinitionofPremiumsegmentsince2023,andweadjust2021-2022accordingly.

Source:Companydata,GoldmanSachsGlobalInvestmentResearch

FinancialSummaryTablebycompany

Exhibit8:2024YTDMonthlyvolumetrendsummarybycompany,basedonGSchannelchecks

_

2024E

Beer

JanFebMarApr

CRBupc.9%roughlyflattishdownHSD%downLSD%

totalvolume

decline,withSPdownonahighbase

downHSD%

totalvolumeunderpressurewhile

decline

BudAPACChinaPremiumcontinuedgrowth,but

SPdeclined.

downhigh

teens%

moderationin

growthmom

downLSD%

Tsingtaoupc.1%

likelyupmid-to-

decline

-6.50%

flattish

-9.10%

Chongqinghighsingledigit

%onlowbase

Industry12.10%

SP=SuperPremium

Source:GoldmanSachsGlobalInvestmentResearch

May

downLSD%

downLSD-MSD%

downMSD-HSD%

slightlydeclineLSD%

-4.50%

Jun

downLSD%

down

HSD%~10%

downDD%

flattoslightgrowth

16July20245

GoldmanSachsChinaBrewing

Exhibit9:2023Monthlyvolumetrendsummarybycompany,basedonGSchannelchecks

Beer

CRB

BudAPACChina

Tsingtao

Chongqing

Industry

Jan

Feb

downmidto

highsingledigit%

upteens%

decline

down2.5%

up20%

uphighteens%

decline

flattish

Mar

updoubledigit%

updoubledigit%

up20%+

upteens%

20.50%

Apr

uphighsingledigit%

updoubledigit%

10.8%

May

uphighsingledigit%

updoubledigit%

-2.0%

uplowteens%

21.10%

upsingledigit%

7.00%

August

downhigh

singledigit%

Sept

flattishto

slgithlydecline

2023Volumegrowth-GSEJuneJuly

Flattishto-1%downlsd-msd%

highsingledigit%decline

+c.2%

Declinetoflattish

1.60%

downlsd-msd%downlsd-msd%uplowteens%

-14.0%downc.10%downhsd%

SlightlypostiveSlightlypostiveupsingledigit%

-3.40%-5.80%-8.00%

Oct

up1%,sub-premiumup25%

downc.midteens%

downc.midteens%

upc.10%,

Wusureboundonlowbase

0.40%

Nov

uphsd%

upc.10%

upteens%

downlowsingle

digit%-10.58%

Dec

downc.1%

upc.1%

downc.10%

upsingledigit%

-15.53%

Source:GoldmanSachsGlobalInvestmentResearch

Exhibit10:2022Monthlyvolumetrendsummarybycompany,basedonGSchannelchecks

Beer

CRB

BudAPACChina

Tsingtao

ChongqingIndustry

Jan-Feb

upteens%

downLSD%toflattish

up~9%

upteens%up3.6%

March

downteens%

downhigh

teens%in2HofMarch

down20%

Flattish-10.3%

April

downdoubledigit%

downhighteens%

down~18%

downmidsingle

digit%-18.3%

May

Flattish

Down10%~lowteens%

Up5-6%

Flattish-0.7%

2022Volumegrowth-GSEJuneJulyAug

Upsingledigit

Uphighsingledigit

9%

Uphighsingledigit

6.40%

Highsingledigittoteens%

singledigit%

midteen%

Highsingledigitto□teens%

10.80%

Teens%

singledigit%

Lowteens%

Negativetosingledigit%

12.00%

Oct

downhsd%

Nov

downhsd%;

premiumdowndd%

Dec

downhsd%

Sep

downmidsingle%;subpremiumminorgrowth

decline;

premiumvolumedeclinedown

5%

decline5.10%

0.8%

downhsd%toteens%

-14.10%

decline

down12%

downhsd%toteens%

-1.70%

decline

down12%

downdoubledigit%

8.50%

Source:GoldmanSachsGlobalInvestmentResearch

Exhibit11:1H24forecastsindetail—bycompany/region

1H24(GSe)

ASPgrowth

Volumegrowth

Salesgrowth

UnitCOGSgrowth

GPMYoYChg

PremiumVolRecurringEBITDA

growthgrowth

RecurringEBITDAMARGIN

RecurringEBITRecurringNP

growthgrowth

CRBBeer

2.0%

-3.5%

-1.6%

0.5%

0.8%

6.6%0.2%

31.4%

0.9%

BudWest*

0.5%

-7.1%

-6.6%

-6.4%

33.0%

BudEast*

8.3%

-0.8%

7.4%

38.5%

31.5%

BudAPAC*

2.1%

-6.3%

-4.3%

-0.1%

-0.9%

32.7%

-7.9%-6.4%

Tsingtao

2.2%

-7.5%

-5.5%

-1.7%

2.3%

-3.2%

2.6%7.9%

Chongqing

1.0%

2.5%

3.9%

-1.1%

1.3%

n.a.

8.7%8.0%

1)*OrganicASP,volume,salesandEBITDAgrowthforBudweiserexcl.forex,butrecurringEBIT/NPgrowthunderforeximpact;2)GPMforTsingtao:aftersalestax+COGS.RemainingcompaniesGPMafterCOGS.

Source:GoldmanSachsGlobalInvestmentResearch

_

Exhibit12:2Q24forecastsindetail—bycompany/region

2Q24(GSe)

CRBBeer-1H24

BudWest*BudEast*BudAPAC*Tsingtao

Chongqing

Salesgrowth

UnitCOGSgrowth

ASPgrowth

Volumegrowth

2.0%-2.4%7.4%-0.2%1.8%0.8%

-1.6%-11.0% 9.5% -7.8% -5.8%1.1%

0.5%

-2.5%1.0%

-3.5%-8.8%2.0%-7.6%-7.5%0.0%

GPMYoYChg

0.8%

-1.4%2.5%0.1%

PremiumVolRecurring

growthEBITDAgrowth

6.6%0.2%

-14.5%60.0%-5.8%

-4.0%n.a.

RecurringEBITDAMARGIN

31.4%30.2%33.3%30.8%

RecurringEBITgrowth

0.9%

-13.2%6.1%0.8%

RecurringNPgrowth

-12.2%4.8%0.8%

1)*OrganicASP,volume,salesandEBITDAgrowthforBudweiserexcl.forex,butrecurringEBIT/NPgrowthunderforeximpact;2)GPMforTsingtao:aftersalestax+COGS.RemainingcompaniesGPMafterCOGS.

Source:GoldmanSachsGlobalInvestmentResearch

Exhibit13:2H24forecastsindetail—bycompany/region

2H24(GSe)

ASPgrowth

Volumegrowth

Salesgrowth

UnitCOGSgrowth

GPMYoYChg

PremiumVolRecurring

growthEBITDAgrowth

RecurringEBITDAMARGIN

RecurringEBITgrowth

RecurringNPgrowth

CRBBeer

2.7%

1.8%

4.5%

-1.4%

2.7pp

17.7%23.0%

12.8%

45.9%

BudWest*

-0.6%

1.3%

0.7%

5.4%

34.5%

BudEast*

4.9%

3.5%

8.5%

14.9%

33.6%

BudAPAC*

0.5%

1.6%

2.1%

0.6%

7.0%

34.3%

19.0%

12.7%

Tsingtao

0.9%

6.7%

7.7%

-2.7%

2.4%

8.4%

89.5%

58.9%

Chongqing

0.6%

1.8%

2.8%

0.4%

0.7%

n.a.

8.3%

10.3%

1)*OrganicASP,volume,salesandEBITDAgrowthforBudweiserexcl.forex,butrecurringEBIT/NPgrowthunderforeximpact;2)GPMforTsingtao:aftersalestax+COGS.RemainingcompaniesGPMafterCOGS.

Source:GoldmanSachsGlobalInvestmentResearch

16July20246

GoldmanSachsChinaBrewing

Exhibit14:FY2024forecastsindetail—bycompany/region

2024(GSe)

ASPgrowth

Volumegrowth

SalesUnitCOGS

growthgrowth

GPMYoYChg

PremiumVolRecurring

growthEBITDAgrowth

RecurringEBITDARecurringEBIT

MARGINgrowth

RecurringNPgrowth

CRB-Beer

2.1%

-1.3%

0.7%2.1%

1.4pp

11.3%4.3%

24.1%

5.6%

CRB-Overall

1.7%

1.5pp

4.9%

24.8%

5.9%

6.7%

BudChina

-1.1%

-5.6%

-6.7%

-2.5%

38.2%

BudWest

-0.2%

-3.1%

-3.3%

-1.0%

30.7%

BudEast

6.4%

1.3%

7.7%

26.1%

30.6%

BudAPAC

1.3%

-2.6%

-1.3%

1.0pp

3.4%

30.6%

2.3%

1.0%

Tsingtao

1.5%

-2.2%

-0.7%-2.2%

2.2pp

1.3%13.0%

18.7%

15.7%

14.6%

Chongqing

1.2%

2.2%

3.5%-0.8%

1.0pp

2.5%8.7%

25.9%

22.5%

9.5%

1)*OrganicASP,volume,salesandEBITDAgrowthforBudweiserexcl.forex,butrecurringEBIT/reportedNPgrowthunderforeximpact;2)GPMforTsingtao:aftersalestax+COGS.RemainingcompaniesGPMafterCOGS.

Source:GoldmanSachsGlobalInvestmentResearch

ForecastandTPChanges

EarningsRevisions:

nForCRB,werevise2024-26Esales/NPby-5%/-10%onaverage(detailsinExhibit23).

oRegardingtheCRBbeersegment,werevisedown2024-26Esalesforecastsby3-5%.Werevisedownthesubpremiumvolumeforecastby4-6%and

currentlyexpectteens%premiumvolumegrowthin2024-26,higherthanpeers.WithlowerASPgrowthpartiallyoffsetbylowerunitcost,werevisedownGPMforecastsby0.9pptonaveragein2024-26E.

oRegardingtheCRBbaijiusegment,welowersalesby6%-13%in2024-26E,toaccountforstillgradualimprovementininventorydigestionandretail

sell-throughimprovement(detailsinExhibit22).

oWestillthinkCRBgeneratesalphavs.otherbeerplayers,withthemost

resilienttoplinegrowthin1H,positivegrowthfromsub-premiumandabove,whileitsmarketingexpenseisabitmorefrontloadedwithsportseventsin

_

2Q.Welookforsequentialimprovementin2H24,expectingrevenue/recurringEBITupto5%/46%yoywithsub-premium/abovevolumegrowthatteens%yoy.

nForBud,ourearningsestimatesremainunchangedvs.ourlastpreviewreportonJune28th(SummaryfinancialsinExhibit25)

nForTsingtao,wetrim2024-26Esalesforecastsby2-4%onweakervolumeandslowerASPgrowthforecasts,leadingto5-10%cutsto2024-26ENPforecasts(detailsinExhibit27).

nForChongqing,welower2024-26Esalesforecastsby2%-5%,andNPforecastsin2024-26Eby1%-6%,mainlyduetosofter-than-expectedvolumepickupYTD

leadingtopotentialmoreoperatingdeleveragingfromtheD&AexpensesofthenewFoshanFactory(detailsinExhibit29).

nForBairun,welower2024-26Esalesforecastsby8-14%andNPby4%-11%respectivelyonestimatedsofteroveralldemandlappingahighbase(detailsinExhibit31).

TPchanges:Reflectingourearningschanges,wereviseour12mTPforCRBtoHK$45

16July20247

GoldmanSachsChinaBrewing

(vs.HK$51prior),wechangeour12mTPforChongqingtoRmb65.3(vs.Rmb69.5prior),our12mTPsforTsingtao-A/Tsingtao-HtoRmb77.7/HK$67.1(vs.Rmb86.2/HK$74.5prior),

andwelowerBairun’sTPby11%toRmb18.7fromRmb21.0.Our12mTPforBudremainsunchangedatHK$13.3.

Exhibit15:SummaryofTP/earningschangesandvaluations

Company

CRB

BUDAPACTsingtao-HTsingtao-AChongqing

Bairun

Ticker

0291.HK

1876.HK

0168.HK

600600.SS600132.SS002568.SZ

Ratings

Buy*

Buy

Buy

NeutralNeutralNeutral

Price

12-Jul-2024

27.959.9951.9070.3962.8316.31

Old

TargetNew

51.0013.3074.5086.2069.5021.00

45.0013.3067.1077.7065.3018.70

Price

Upside

Change

61%33%29%10% 4%15%

-12% 0%-10%-10% -6%-11%

ExitP/E

Old

23X23X18X23X23X23X

New

23X23X18X23X23X23X

CurrentPriceImplied

2024e

15X18X14X20X21X20X

2025e

13X16X13X19X19X18X

2026e

12X15X12X17X18X16X

Target2024e

24X25X18X22X22X23X

PriceImplied

2026e

19X19X15X19X18X19X

2025e

21X22X16X20X20X21X

Company

Revenuechanges

NIchanges

2024e

2025e

2026e

2024e

2025e

2026e

CRB

-3.6%

-4.6%

-5.4%

-9.6%

-11.1%

-10.6%

BUDAPAC

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

Tsingtao-H

-1.8%

-2.8%

-4.0%

-4.8%

-8.2%

-9.9%

Tsingtao-A

-1.8%

-2.8%

-4.0%

-4.8%

-8.2%

-9.9%

Chongqing

-1.9%

-3.5%

-5.2%

-1.4%

-3.9%

-6.1%

Bairun

-8.0%

-10.9%

-13.5%

-3.5%

-7.9%

-11.3%

*denotesthestockisontheAPACConvictionList;TPsarebasedona12-monthtimeframe.Source:Datastream,GoldmanSachsGlobalInvestmentResearch

Valuation

Exhibit16:ChinabrewersarecurrentlypricedatthelowendofhistoricalNTMP/E

Exhibit17:ThevaluationoftheChinabeersectoristrendingatrecentyears’low

_

120.0x100.0x80.0x60.0x40.0x20.0x0.0x

PE:Currentvs2019-PresentRange

P/Ebasedon'24GSe2019-PresentMedian

BudweiserCRBTsingtao-HTsingtao-AChongqing

APAC

2019

240%200%160%120%80%40%0%

AvgsectorpremiumoverMSCIChina

2020

2021

2022

2023

2019-PresentAvgsectorpremiumoverMSCIChinaAvgSectorPE

Current

50.0x40.0x30.0x20.0x10.0x0.0x

Source:Bloomberg,Companydata,GoldmanSachsGlobalInvestmentResearchSource:Bloomberg,DatacompiledbyGoldmanSachsGlobalInvestmentResearch

16July20248

GoldmanSachsChinaBrewing

Exhibit18:Chinabrewers’valuationhasrecentlyfallenbelowthelevelofglobalbrewers,andisnowata13%discount

P/E

NTMP/Evaluationpremium/discountofChinabrewersvs.globalbrewers

200%

150%

ChinabeerweightedP/E(LHS)

50x45x40x35x30x25x20x15x10x

Chinapremium/discountoverglobalpeers(RHS)

100%

50%

GlobalbeerweightedP/E(LHS)

0%

5x0x

-13%

Jan-19

Jul-19

Jan-20

Jul-20

Jan-21

Jul-21

Jan-22

Jul-22

Jan-23

Jul-23

Jan-24

Jul-24

-50%

ChinabrewersweightedaverageincludeChinabeercoverage.GlobalbrewersweightedaverageincludeABInBev,Heineken,Carlsberg,Kirin,Asahi.

Source:Bloomberg,GoldmanSachsGlobalInvestmentResearch

Exhibit19:MSCIChinavs.Beercoverage

NTMPE:MSCIChinavsBeerCoverage

BeerpremiumoverMSCI(RHS)

P/E80x

BeercoverageweightedP/E(LHS)

70x60x50x40x30x20x10x

MSCIChinaPE(LHS)

Jan-19

Jul-19

Jan-20

Jul-20

Jan-21

Jul-21

Jan-22

Jul-22

Jan-23

Jul-23

Jan-24

0x

Source:Bloomberg,GoldmanSachsGlobalInvestmentResearch

Premium

280%

/4%

20

200%

160%

18

120%%

40%

14

0%

Jul-24

420%

10

Exhibit20:MSCIChinaconsumerstaplesvs.Beercoverage

P/E

120x

100x

80x

60x

40x

20x

0x

NTMPE:MSCIChinaConsumerStaplesvsBeerCoverage

BeerpremiumoverMSCIChinaConsumerStaples

Beercoverageweighted(LHS)

MSCIChinaConsumerStaples(LHS)

115%100%85%70%55%40%25%10%-5%

Source:Bloomberg,GoldmanSachsGlobalInvestmentResearch

_

Exhibit21:ChinaBeercompsheet

Ticker

Beer

1876.HK0291.HK0168.HK600600.SS600132.SS002568.SZ ABI.BRCARLb.COHEIN.AS 2502.T

2503.T2587.TAvg.

Company

BudweiserAPAC

ChinaResourcesBeer

TsingtaoBrewery(H)

TsingtaoBrewery(A)

ChongqingBrewery

ShanghaiBairun

Anheuser-BuschInBev

Carlsberg

Heineken*

AsahiGroupKirinHoldings

SuntoryBeverage&FoodLtd*

Rating

Buy Buy* BuyNeutralNeutralNeutralNeutral Buy Buy Buy SellBuy

MktcapUS$mn

16,529

11,387

8,757

12,980

4,190

2,325

123,065

17,453

55,797

18,522

11,027

10,909

Ccy

HKD

HKDHKDCNYCNYCNYEURDKKEURJPYJPYJPY

Price

15-Jul-2024

9.76

27.4050.6069.78

62.87

16.08

55.34

853.0088.765762.002147.505568.00

12-mTP

13.30

45.00

67.10

77.70

65.30

18.70

59.00

1100.00108.007500.002100.007000.00

+/-

36%64%33%11%4%16%7%29%22%30% -2%26%

2024E

18X15X13X20X21X20X19X15X18X15X13X19X17X

PE2025E

16X13X12X18X19X18X17X14X15X14X13X16X15X

2026E

14X11X12X17X18X16X16X13X14X13X12X16X14X

TP2024E

25X24X18X22X22X23X20X20X21X19X13X23X21X

Implied2025E

22X21X16X20X20X21X18X18X19X18X12X21X19X

PE

2026E

19X19X15X19X18X19X17X16X17X17X12X20X17X

24-26ERevCAGR

5%4%2%2%5%10%3%4%5%3%2%3%4%

24-26ENPCAGR

13%15%8%8%8%11%10%9%12%7%2%9%9%

EV/EBITDA

2024E

7X9X7X12X7X14X9X10X10X10X9X7X9X

2025E

6X8X6X11X7X12X8X9X10X9X9X6X8X

2026E

5X6X6X10X6X11X8X9X9X9X8X6X8X

ROE2024E

8%

15%

16%

16%

33%

19%

7%

29%

12%

8%

9%

8%

15%

Divyield2024E

4.1%3.6%4.9%3.4%4.4%2.6%2.2%3.0%2.0%2.5%3.4%2.1%3.2%

YTDperf%

-33%-20%-3%-7%-5%-35%-5% 1%-3%10%4%20%-6%

PricesasofJul15th;*denotesstockisontheAPAC/EuropeConvictionList.Source:Companydata,GoldmanSachsGlobalInvestmentResearch

16July2024