China Resources Beer's Mid-to-High-End Products Show Resilience, Spirits Business Drags on Growth

Questioning AI · Liquor Business Dragging Performance, How Will China Resources Adjust Its Strategy?

Interface News Reporter | Wu Bingcong

Hong Kong-listed China Resources Beer shows resilience in beer sales for the 2025 fiscal year, but its liquor business underperformed overall. On March 23, China Resources Beer released its full-year 2025 performance report, indicating that the company achieved a revenue of RMB 37.985 billion, a decrease of 1.68% year-over-year; and a net profit attributable to shareholders of RMB 3.371 billion, down 28.87% year-over-year.

Regarding China Resources Beer’s 2025 performance, the public’s main concerns are the impairment of goodwill related to its liquor business and how the company plans to continue developing in the high-end beer market after Hou Xiaohai’s departure.

Starting September 3, 2025, Executive Director Zhao Chunwu was promoted from President to Chairman of the China Resources Beer Board, marking his first annual report since succeeding Hou Xiaohai. On the afternoon of March 23, the management held an earnings conference, where Zhao Chunwu addressed these issues.

High-End Focus Drives Beer Business Growth

In 2025, China Resources Beer’s financial highlights remain evident, with its sales of high-end beers still favored by the market.

According to the National Bureau of Statistics, in 2025, the total beer production of large-scale enterprises in China was 35.36 million kiloliters, a 1.1% decline year-over-year, marking the second consecutive year of decline.

Against this industry contraction, China Resources Beer achieved sales of 11.03 million kiloliters in 2025, up 1.4% year-over-year. Revenue remained roughly flat compared to the previous year at RMB 36.489 billion.

In the mid-to-high-end beer segment, the company’s sales of sub-premium and above beers grew by mid to high single digits year-over-year, accounting for nearly 25% of total sales. Brands like Heineken, Old Snow, and Red爵 saw sales increase by nearly 20%, around 60%, and over 100%, respectively.

Snow, Brave the World, and other beers / Photo: Interface News Wu Bingcong

Combined with raw material cost savings, the company’s gross profit margin for beer increased by 1.4 percentage points to 42.5%. For the beer industry, this is a relatively impressive gross margin.

Management also responded during the earnings call on how to stabilize high-end beer prices and attract young consumers. Zhao Chunwu emphasized that the company adheres to quality first, focusing on value for money and exceeding expectations. Additionally, high-endization allows for brand premium, and aligning brand tone with young people’s values is very important.

Zhao Chunwu cited an example of marketing practice: Heineken’s collaboration with the ATP 1000 Shanghai Masters tennis tournament helped it reach tennis enthusiasts. “Once consumers establish perceptions and preferences for a brand’s tone, it becomes difficult for other brands to attract and convert them through price wars.”

Second Growth Curve Underperforming

China Resources Beer aims to develop its liquor business as a second growth driver, but in 2025, its liquor performance dragged down overall growth.

In 2025, the liquor segment under China Resources Beer generated RMB 1.496 billion in revenue, a decline of about 31% year-over-year, with pre-interest and tax profit at - RMB 3.354 billion.

The company has been involved in the liquor sector for three years. In 2023, it invested over HKD 12 billion to acquire a 55.19% stake in Guizhou Jinsha Liquor, officially entering the liquor industry. However, during a period of deep industry adjustment, Jinsha Liquor’s performance fell short of expectations, leading China Resources Beer to record an impairment of approximately RMB 2.877 billion in goodwill in 2025.

Although goodwill impairment is a non-cash item that does not affect cash flow or daily operations, it reflects significant short-term operational pressure in the liquor business and indicates that it will take a long time to restore profitability.

Regarding the performance of the liquor segment, Zhao Chunwu explained during the earnings call that the company’s strategy to develop liquor was a strategic transformation. The reason is that China’s beer market is reaching a consumption peak, with five major beer companies, including China Resources, holding about 90% of the market share. To sustain growth, leading beer companies need to find a “second growth curve.”

“We carefully considered entering liquor. In alcohol beverage consumption, liquor has a large market space and a high tolerance for risk,” Zhao said. He acknowledged that the liquor industry has experienced intense turbulence, especially due to external influences, which has brought unforeseen difficulties after China Resources Beer’s entry.

“It could be said that not choosing to expand into liquor wouldn’t be wrong, but from a corporate development perspective, it might also be that we did nothing wrong, yet we could be left behind by the times without realizing it,” Zhao added.

The management believes that in future development, China Resources will continue to build a community of shared interests with distributors, avoiding channel inventory pressure and maintaining reasonable profits for channel sales.

From the signals currently released by China Resources Beer, they are still willing to invest effort into exploring growth potential in the liquor market. The management believes that after only three years of involvement, it is premature to change the strategy.

Regarding the underperforming liquor segment, China Resources Beer revealed seven strategies to promote long-term healthy development during the earnings conference. Key directions include: focusing on mid-to-high-end and light bottle products; promoting dual-brand strategies with Jinsha and other brands, clarifying brand and pricing positioning; leveraging the China Resources distribution network to build asymmetric channel barriers; and focusing on core and advantageous markets to achieve regional leadership.

2026 marks the beginning of the “14th Five-Year Plan,” and Zhao Chunwu outlined the future development directions for China Resources Beer. First, continuing the previous path, the high-end strategy will remain unchanged.

Second, accelerating the development of emerging businesses. Zhao said, “This area is currently small in total volume but growing rapidly, reflecting changing consumer demands.”

Third, China Resources Beer will focus on internationalization and overseas expansion during the “14th Five-Year Plan.” The management believes that as domestic sales stabilize, international expansion becomes an important consideration. Zhao stated that internationalization involves different economic cultures and regions, so the first step is to establish a presence and fill gaps. They will prioritize countries friendly to China and culturally close, while seeking suitable partners to reduce initial risks and lay the groundwork for future expansion.