CCB International has revised down its net profit forecasts for TSINGTAO BREW (00168) by 3% and 4% for this year and next, citing slower average selling price growth and a more cautious sales outlook. The valuation benchmark has been shifted to 2026, with the EV/EBITDA multiple reduced from 12x to 10x to reflect weaker consumption and slower premiumization progress compared to peers. The target price for the company's H-shares was also lowered by 7%, from HK$55.6 to HK$51.5, while maintaining a "Neutral" rating.

The report noted that TSINGTAO BREW's Q3 net profit rose 1.6% year-on-year to RMB 1.37 billion, but revenue fell short of expectations. Despite potential support from pre-Chinese New Year stockpiling and consumption stimulus policies, the bank expects weak consumer demand to persist from Q4 2025 through early 2026. With industry promotions becoming more routine, the bank sees limited risks to the company's volume growth and market share.

CCB International projects 2026 revenue growth to accelerate to 2.6%, driven by 1.7% volume growth and a 1% increase in average selling prices. Assuming lower barley costs and continued product mix improvements, the bank forecasts a 0.2 percentage point rise in gross margin to 42% and a 0.3 percentage point increase in EBIT margin to 15.8% in 2026.

Additionally, the company terminated its planned acquisition of Shandong Jimo Huangjiu on October 26, eliminating uncertainties related to the transaction's operational impact.