Tsingtao Brewery's Hong Kong-listed shares soared 18.75 per cent yesterday on news the company's interim net profit would increase by more than 50 per cent and that it had signed a strategic alliance agreement with Anheuser-Busch of the United States.
Tsingtao's H shares rose 60 HK cents yesterday to close at HK$3.80 - the highest level since September 1998. However, Tsingtao's A shares were immune to the news, rising only 0.23 per cent to 8.82 yuan per share.
China's largest brewer announced in a stock exchange statement that its unaudited net profits for the first half of this year are likely to increase more than 50 per cent on year, due to a significant increase in total sales and revenues.
As an A-share listed firm on the Shanghai stock exchange, Tsingtao is required to issue a profit warning if it expects a 50 per cent or more increase in net profit or net loss.
Tsingtao will announce its interim results on August 14.
'The increase in profit is not based on international accounting standards, it is based on mainland accounting standards. But they should be able to reach 50 per cent, especially because of the World Cup this year. Beer sales were very good during the period the World Cup was on,' said Sun Hung Kai Research beverage analyst Teddy Cui.
Analysts also pointed out that Tsingtao's acquisition of more than 30 breweries over the past several years had increased its annual production capacity to 3.8 million tonnes, making a 50 per cent increase in net profit feasible.
