Amid an overall contraction in the industry, beer companies are beginning a major reshuffle. According to data from the National Bureau of Statistics, from January to June 2026, beer production among enterprises above designated size nationwide reached 19.362 million kiloliters, up only 0.2% year-on-year. The traditional peak consumption season was not "peak" at all, with output in May, June, and July declining 6.2%, 3.1%, and 8.9% respectively year-on-year. This was partly due to weather factors such as heavy summer rainfall and frequent typhoons, but it was also closely tied to weak demand in catering consumption.
Eight listed beer companies achieved total revenue of 65.606 billion yuan in the first half, down 0.1% year-on-year, while total net profit attributable to parent companies reached 12.003 billion yuan, down 2.63% year-on-year. Beneath the seemingly calm surface, internal divergence was sharp: among leading brewers, China Resources Beer and Yanjing Beer maintained revenue growth, while Tsingtao Brewery and Chongqing Brewery showed weakness, with revenues declining 4.08% and 2.98% respectively. In terms of net profit, China Resources Beer fell 10.71% and Chongqing Brewery dropped 7.83%, while Yanjing Beer surged 26.86%. Among smaller and mid-sized brewers, both Zhujiang Brewery and Huiquan Beer posted revenue growth exceeding 5%, with net profit growth reaching 10.02% and 23.26% respectively. Tibet Development and Lanzhou Huanghe saw revenue growth but sharp declines in net profit.
Over the past few years, the beer industry had three major growth engines: first, product mix upgrading that drove per-ton price increases; second, declining raw material costs that boosted gross margins; and third, rising concentration that brought incremental volume to leading brewers. This year, the cost-reduction dividend has neared its limit, and with rising aluminum prices pushing up packaging material costs, the industry has entered a new round of price adjustments. Meanwhile, the importance of the premium battlefield has become even more prominent, with brewers achieving volume growth in the premium market reaping the rewards, while those losing ground are beginning to fall behind.
Tsingtao Brewery's Revenue Declines as Sales Volume Shrinks
In the first half of 2026, Tsingtao Brewery Company Limited (600600) achieved revenue of 19.655 billion yuan, down 4.08% year-on-year, marking the first time in nearly four years that mid-year revenue fell below 20 billion yuan. Net profit attributable to parent companies reached 3.920 billion yuan, up 0.40% year-on-year, the lowest half-year profit growth rate since mid-2017. The revenue decline was primarily driven by shrinking sales volume, with total sales volume in the first half reaching 4.50 million kiloliters, a decrease of 4.90%. By quarter, first-quarter sales volume fell 2.61% year-on-year, while the second quarter, affected by weak consumer demand, saw the decline widen to 7%, corresponding to a 6.73% year-on-year revenue drop in the second quarter alone, dragging down overall first-half performance.
Specifically, the sales volume decline may have been dragged down by mass-market brands, which fell approximately 14.3% year-on-year in the second quarter. Sales volume of the main Tsingtao Brewery brand reached 2.708 million kiloliters, down only marginally by 0.2% year-on-year, of which mid-to-high-end and above products accounted for 2.044 million kiloliters, up 2.6% year-on-year, representing 45.4% of total sales volume, an increase of 3.3 percentage points year-on-year. Taking a longer view, two trends deserve attention. First, mid-to-high-end growth is slowing: in the first half of 2023, mid-to-high-end and above sales volume was 1.975 million kiloliters, up 15% year-on-year; in 2024, volume fell 4%; in the first half of 2025, it grew 5.1%; and in the first half of 2026, growth slowed to 2.6%. Second, while the product mix is upgrading, total sales volume is shrinking. In 2023, total sales volume reached 5.023 million kiloliters, and the first half of 2026 saw a reduction of 10.41% compared with the same period in 2023. The decline in mass-market brand sales is to some extent a strategic choice by the company to proactively phase out low-margin products, but the pace of contraction exceeded expectations and could lead to reduced channel coverage in lower-tier markets, posing a risk of losing the mass-market base.
By region, revenue in the three core markets of Shandong, North China, and East China all declined year-on-year, with Shandong, the company's home base, seeing a revenue drop of nearly 5%, making it the core drag on overall performance. Only South China and Southeast China achieved single-digit positive growth, but their scale is too small to offset the contraction in core markets.
Net Profit Growth Mainly Driven by Expense Reduction and Non-Recurring Gains
Against the backdrop of declining revenue, Tsingtao Brewery Company Limited (600600) still posted slight net profit growth, mainly due to the following factors. First, product mix upgrading combined with cost declines led to gross margin improvement. The proportion of mid-to-high-end and above product sales increased in the first half. Combined with falling prices of major brewing raw materials such as barley, costs declined, driving a 1.16 percentage point increase in gross margin. Second, selling expenses contracted significantly. Selling expenses fell 12.52% year-on-year in the first half, and the selling expense ratio declined year-on-year, boosting net profit. The mid-year report explained this was mainly due to the impact of sales volume and reduced business promotion expenses in certain regions. Third, the company recorded fair value change gains of 181 million yuan in the first half, a sharp increase of 238.27% year-on-year, mainly from fair value changes in wealth management products and bonds held. These non-operating gains provided additional support to net profit.
It is worth noting that the profit growth driven by declining raw material costs, reduced selling expenses, and fair value change gains is not sustainable. In terms of new business, the whisky and other spirits categories that Tsingtao Brewery Company Limited (600600) has invested in are still in the early construction phase, with construction in progress reaching 622 million yuan in the first half, and no large-scale revenue has been generated yet. Overall, Tsingtao Brewery Company Limited's (600600) non-GAAP net profit growth of 0.99% in the first half is already at a nearly ten-year low, and profit growth is highly dependent on "cutting costs" rather than "growing revenue." With total sales volume continuing to contract and mid-to-high-end product growth slowing year by year, the profitability of the core business is also under pressure.
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