UPDATE 1-China Resources Q3 profit up 55 pct

* Q3 profit up 55 pct as supermarket, brewery grow

* Says Hong Kong retail industry remains challenging (Adds details)

HONG KONG Nov 19 (Reuters) - Consumer sector-focused China Resources Enterprise (0291.HK) on Thursday posted a 55 percent rise in third-quarter profit on growing sales, paving the way for stronger full-year results despite a weak first half. China Resources, owner of the country's top beer brand, Snow, said profit for July-Sept rose to HK$1.04 billion ($143.2 million), compared with HK$671 million a year earlier when its retail, food processing and distribution, and textile businesses took a hit in the global financial crisis.

Revenue increased to HK$19.7 billion from HK$18.3 billion a year ago. Of which, revenue from retail operations rose 5.8 percent to HK$9.39 billion, accounting for about 48 percent of the total.

"The operating environment of Hong Kong's retail industry is expected to continue to be challenging," said managing director Chen Lang in an earnings statement.

"Still, the wealth effect that resulted from the recent rallies in the stock market and rising property prices has improved consumer sentiment."

Beverage sales were up 13.1 percent to HK$7.05 billion during the quarter, accounting for 36 percent of the total revenue for the quarter.

Sales volume of beer brand "Snow" was up 20.3 percent to 6.13 million kiloliters during the first nine months of 2009, accounting for 86 percent of the company's total sales volume of beer.

The increase in sales volume was mainly attributable to greater demand for beer in warmer weather during the first nine months under review and as production capacity expanded, it said.

"The Group will endeavor to prudently identify and evaluate investment opportunities to increase production capacity and operational efficiency through acquisition, greenfield investment and expansion of existing plants," Chen said.

Beijing-backed China Resources operates supermarkets, processes meat, runs a China joint venture with fashion retailer Esprit (0330.HK), and produces its Snow-brand beer with SABMiller Plc (SAB.L) in the world's fastest growing major economy. It operated about 2,700 stores, from convenience stores to hypermarkets on the mainland and in Hong Kong at the end of September.

In October, the Chinese conglomerate said it aimed to focus on the rapidly growing mainland consumer market through an asset swap with a major shareholder, in a deal valued at nearly HK$5 billion ($645 million). [ID:nHKG728]

The conglomerate will transfer its interest in a textile division and two container terminal operations in Hong Kong and China's Yantian to its major shareholder in exchange for a hypermarket chain and a brewery in Shandong. The company was in talks with various potential buyers for its stake in a joint venture with Esprit (0330.HK)

Last week, JP Morgan said in a research note that it expected to see 82 percent earnings growth at the company's beverage division for second half of 2009.

Shares of China Resources Enterprise rose 45 percent in the third quarter, outperforming a 14 percent rise in broader market .HSI. The stock edged up 0.61 percent to HK$24.85 before the results on Thursday. (US$1=HK$7.75) (Reporting by Donny Kwok; Editing by Ken Wills)