Daiwa Research has released a report indicating that despite a challenging overall beer consumption environment in mainland China, China Resources Beer (00291) has seen its premium brand Heineken continue to post approximately 20% year-on-year sales growth in recent months. This performance reflects Heineken's steadily increasing share in the premium segment, leading the firm to maintain its "Buy" rating on the stock.

However, Daiwa noted that the company's second-tier premium brand, Snow Draft, may still face pressure due to weakened brand appeal and a heavy reliance on the highly competitive foodservice channel, which has yet to stabilize. While the group is rapidly launching new brands in the second-tier premium category, Daiwa pointed out that significant channel investments are still required to drive volume expansion.

On the cost front, aluminum prices rose 16% year-on-year and 3% month-on-month in August. Given that canned beer accounts for approximately 45% of China Resources Beer's total volume, the company faces notable input cost headwinds. Daiwa also highlighted that Budweiser APAC (01876) has a 12-month rolling cost lock-in policy, which affords it relatively lower input cost pressure in the second half of the year.

Looking ahead, Daiwa believes that ahead of the Chinese New Year holiday in February next year, a broad-based industry price hike cannot be ruled out, as all major beer players grapple with commodity cost pressures and may seek to pass these costs on to retail consumers.