The beer industry went through a difficult peak season in 2026. The disrupted rainy weather combined with the slow pace of recovery in food and beverage consumption reduced the success of the traditional peak in production and sales in the third quarter. The Zhitong Finance App notes that from July to September this year, the beer production of enterprises above the scale fell by 8.9%, 6.5%, and 7.8%, respectively, over the same period last year, and the industry has been in a contraction range for 6 consecutive months. The failure to recover sales during the traditional peak season indicates that short-term pressure on the industry does exist.
Budweiser Asia Pacific (01876)'s latest results also confirm this: in the third quarter of 2026, sales in China fell 16.8% year on year, revenue fell 16.9% year on year, normalized EBITDA fell 30.2% year on year; sales and revenue both fell 9.7% year on year in the first three quarters. The combination of factors such as weak food and beverage channels, unfavorable weather, and channel inventory removal made the third quarter a window under pressure on the industry's prosperity.
However, the weak figures for a single season are not necessarily a conclusion of the trend. Some analysts have pointed out that pessimistic expectations have been absorbed quite a bit in previous stock price adjustments. With the marginal improvement in the consumption scenario in the fourth quarter and the shift in the year-on-year base, has the beer sector now bottomed out and rebounded? As the most representative high-end sample in the industry, Budweiser Asia Pacific provides us with an intuitive perspective.
Clues to resilience in leading performance
According to the Zhitong Finance App, in the first three quarters of this year, the company achieved revenue of 4.620 billion US dollars, down 3.7% year on year; total sales volume was 6283.40 million liters, down 4.9% year on year. These two declines were much milder than the single season in China. They also showed that the pressure in the third quarter was not evenly distributed, but rather concentrated on ready-to-drink channels and weather disturbances in China.
The really notable structure is hidden in the difference between the two declines. The decline in sales was greater than the decline in revenue, which meant that revenue recorded a positive increase of 1.2% per 100 litres. In an environment where total volume is under pressure, Budweiser Asia Pacific has not stopped upgrading its pricing capabilities and product structure as the leader. Weak ready-to-drink channels, weather disturbances, and channel inventory removal mentioned at the beginning explain why sales are falling, but they can't explain why prices are still rising — this just shows that the decline in sales is a scenario problem; it is not a systematic decline in consumers' willingness to pay premiums to brands.
In the research report, CICC also pointed out that in Q3 Budweiser Asia Pacific sales in China fell 10.1% year on year, but the average sales price increased 1.9% year on year. The pressure on the revenue side and profit side mainly came from volume contraction rather than price loosening. In other words, Budweiser Asia Pacific did not fail in the first three quarters; rather, sales declined and prices continued to rise. Performance showed resilience in “volume reduction and price increase.”
On the profit side, the company's normalized EBITDA fell 13.2% year over year, and profit margin shrank to 27.0%. This contraction certainly has an operating leverage effect caused by a decline in revenue, but it is also related to one-time factors such as the company's internal restructuring in the Chinese market and provision of accounts receivable in India. If the observation cycle is lengthened, Budweiser Asia Pacific's ability in high-end and product portfolios is still resilient, and profit-side repair flexibility depends on the ready-to-drink scenario and the speed of recovery in non-ready-to-drink channels. When sales are marginally stabilized under the dual support of a low base and improved consumption scenarios, positive revenue growth per 100 litres is expected to shift from a current structural hedging factor to an amplifying factor driving profit recovery, and profit margins are also expected to shift from phased pressure to moderate improvement.
The industry sentiment is “weak”, and valuations have been downgraded
In fact, from an industry perspective, it has been quite common for the beer industry to be “weak” since the third quarter, and because of this, market pricing already fully reflects this reality. Guojin Securities clearly stated in the summary of the three-quarter alcohol report that the weak peak season was mainly hampered by rainy weather and relatively weak food and beverage consumption. The 26Q3 beer sector's revenue fell 4.0% year on year, and net profit to mother fell 8.6% year on year.
The general decline on the sales side is even more convincing: Budweiser Asia Pacific China, Tsingtao Brewery, Chongqing Beer, and Pearl River Brewery recorded year-on-year declines of 16.8%, 9.1%, 9.6%, and 2.3%, respectively. However, many brokerage firms believe that the beer industry is still at the stage of “stable volume and price stability and profit pressure” after the 2026 peak season, but sector valuations have fallen back to a relatively low range, and the market's pricing for weak demand, declining sales, and rising costs is adequate.
According to the Zhitong Finance App, the rationality of this judgment can be understood from two dimensions. First, from the perspective of valuation and dividends, the beer industry has a steady competitive pattern and the leading cash flow quality is high. After the valuation is digested, the appeal of dividend returns begins to have defensive value. Second, judging from the pace of expected interpretation, when negative variables such as declining sales volume, rising costs, and shrinking profit margins have been repeatedly discussed by sellers and included in the reduction of profit forecasts, the room for further systematic decline is narrowing.
In this industry context, even though CICC lowered Budweiser Asia Pacific's target price while maintaining the “outperforming industry” rating, and estimated that the current stock price corresponds to the 2026 EV/EBITDA by about 8.1 times, there is still considerable room for improvement compared to its target price, which also confirms that “valuation has reached a low level” market consensus.
The rebound from bottom still needs to be verified
Market analysis further indicates that in the fourth quarter and the first quarter of next year, the beer sector is expected to enter the “bottom area+improvement to be verified” positive observation window. Guosheng Securities said that at present, beer is gradually entering the low season. It is expected that the beer consumption scene will improve in 26Q4 under a low base, and explain the path of leading the way in which food and beverage recovery is transmitted and quality leaders take the lead in restoration.
According to the Zhitong Finance App, although the fourth quarter was a traditional low season, a low base helped improve year-on-year readings. In the same period of 2025, the beer industry also faced weak demand and lack of scenarios, which objectively reduced the pressure on year-on-year data. It is worth noting that food and beverage revenue remained positive at 2.1% in September of this year, which means that the ready-to-drink channel did not continue to deteriorate, but stabilized at a low level.
As weather disturbances subside, although the total amount of dine-in and nighttime consumption in Q4 cannot be compared with the peak season, the direction of year-on-year improvement is signalling “whether the bottom of demand has appeared”. For Budweiser Asia Pacific, the significance of this window is particularly special: the company actively promoted channel and organizational adjustments in the Chinese market in the first three quarters, sacrificing part of sales volume in the short term in exchange for inventory and channel health restoration. If the Q4 consumption scene recovers as expected, Budweiser Asia Pacific, the industry leader, is expected to show a faster marginal repair speed than the industry in terms of low base.
Therefore, Budweiser Asia Pacific's third quarter results were not simply bad. It not only reflected that the short-term adjustments in the industry were not over, but also showed that the leaders are still resilient in terms of structural upgrading and channel transformation. The current key to the beer sector is not to expect an immediate reversal in demand, but to wait for verifiable improvements in the consumption scenario and sales side after pessimistic expectations are fully released. For leading companies with brand, channel, and product capabilities, the present is more like an observation window after a stress test, and is expected to be a prelude to a new round of structural restoration.