Tsingtao Q3 net jumps on lower barley prices
* Q3 net profit up 93 pct to 615 million yuan
* Increase due to soft barley prices, consumption recovery
By Donny Kwok
HONG KONG, Oct 29 - Tsingtao Brewery <0168.HK> <600600.SS>, China's best known beer brand, said on Thursday its net profit jumped 93 percent in the third quarter, as barley costs remained soft and the country's beer consumption continued to recover.
Analysts had been expecting Tsingtao, which competes with Heineken <HEIN.AS>, Carlsberg <CARLb.CO>, Kingway Brewery <0124.HK>, and Snow Beer brands, to post strong growth in earnings due to the lower price for barley.
The Chinese brewer had earlier this month forecast a 75 to 85 percent increase in January-September profit from a year earlier as it boosted domestic sales, improved brand integration and product mix and lowered its costs. [ID:nHKG309139]
Analysts are generally positive on Chinese brewers including Tsingtao due to a faster-than-expected recovery in China's beer market. They said Tsingtao's volume growth was basically in-line with the market.
UBS said last week that profit growth for top breweries in China would maintain their momentum from the first half as barley costs continued to come down in the third quarter while a lowering barley price for 2010 is likely a positive as well.
Tsingtao, the second largest brewer in China by volume, said its net profit rose to 615.18 million yuan for the three months through September, from 318.69 million yuan a year earlier.
Deutsche Bank said in a research note that an improved gross margin and lower effective tax rate were set to help the strong growth of Tsingtao as its fundamentals improved.
Analysts polled by Thomson Reuters I/B/E/S expect on average for Tsingtao's profit for 2009 to rise about 60 percent to 1.11 billion yuan.
Shares in Tsingtao rose 19 percent in the third quarter, outperforming a 14 percent rise in the benchmark Hang Seng Index <.HSI> during the 3-month period. (Reporting by Donny Kwok; editing by Doug Young and Karen Foster)