China Resources Beer's "14th Five-Year Plan" Concludes: RMB 2.8 Billion Impairment on Baijiu Business, Premiumization and Diversification Strategies Unchanged

On March 23, China Resources Beer released its performance report for the final year of the "14th Five-Year Plan" period. The group achieved a consolidated revenue of RMB 37.985 billion in 2025, a year-on-year decrease of 1.68%.

Due to a provision of RMB 2.877 billion for goodwill impairment in the baijiu business this year, the profit attributable to shareholders was RMB 3.371 billion, a year-on-year decrease of 28.87%.

In 2025, China Resources Beer's beer business showed steady performance, with sales volume of approximately 11.03 million kiloliters, a slight increase of 1.4% year-on-year. The gross profit margin rose to 42.5% due to premiumization and cost savings.

Among these, sales volume of super-premium and above beer increased by a mid-to-high single-digit percentage year-on-year, accounting for nearly 25% of the total sales volume. The growth rate for standard premium and above products approached 10%.

Zhao Chunwu, Chairman of China Resources Beer, pointed out that the premiumization of beer in China has entered its "second half." He predicted that the industry's product structure will gradually shift from a pyramid shape to a more balanced one. If the total market volume remains stable, by 2030, the scale of super-premium and above products in the industry may exceed 10 million tons, approaching one-third of the total.

Based on this, China Resources Beer holds a "cautiously optimistic" attitude towards the industry, believing that even with slowing economic growth, consumption of relatively lower-priced alcoholic beverages will still have room for activity.

The shift in channel focus has become a key concern for management.

Zhao Chunwu mentioned that due to the impact of the pandemic on the catering industry, the ratio of on-premise to off-premise sales has reversed from the original 55:45, with the on-premise ratio even lower. Addressing this trend, China Resources Beer is making full efforts to address shortcomings in emerging businesses.

According to management, the group's online business, including e-commerce and instant retail, is growing rapidly, with instant retail achieving an average annual growth of over 50% in recent years. In the future, the company will invest more resources in cultivating new business formats and matching them with innovative product matrices.

In addition, China Resources Beer has begun to selectively "revive" local brands, carrying out "refined retro-style" innovation. For example, the "Hailar" brand for the Inner Mongolia market has been redesigned in packaging and brew to meet consumers' desire for diversification and regional characteristics, positioning it as super-premium or above.

Compared to the steady progress of the beer business, the baijiu business faced significant challenges in 2025, with revenue falling by nearly 30% year-on-year to RMB 1.496 billion. Regarding the highly anticipated RMB 2.877 billion goodwill impairment, Zhao Chunwu explained that this treatment fully considered macroeconomic factors, industry cycles, and consumption recovery.

This impairment originated from the substantial acquisition of Jinsha Liquor in early 2023, which resulted in RMB 7.421 billion in goodwill. However, Jinsha Liquor's performance after the acquisition did not meet expectations, and the baijiu business's EBITDA (excluding impairment) plummeted by 69% year-on-year to RMB 264 million in 2025.

However, management has not wavered from its diversification strategy.

Zhao Chunwu emphasized that venturing into baijiu was a choice for a second growth curve after "careful deliberation." He believes that although the baijiu industry is in a period of deep adjustment, its market size is large and its tolerance for error is also significant. "Doing it might entail greater risks and pressure than not doing it, but for the company's development, it is an indispensable attempt."

In terms of specific operating strategies, President Jin Hanquan proposed "stability" as the core direction: first, stable brands, focusing on "Zhaiyao" for high-end business and "Jinsha Huisha" for the mass market; second, stable pricing, ensuring dealer profits through strict control of sales expenses and digital traceability to prevent inventory buildup; third, stable channels, promoting the transformation of dealers from "earning rebates by stocking inventory" to "earning profits through sales."

The highly anticipated "Beer and Baijiu Dual Empowerment" strategy is entering a critical stage.

Zhao Chunwu admitted that the strategy is still immature, with baijiu flavors and venues sold through beer channels being rather mixed and having gaps in compatibility with the company's current three baijiu enterprises.

Currently, China Resources Beer is developing "plain bottle baijiu" suitable for beer channels based on the intentions of over 10,000 distributors. Concurrently, the baijiu business is also deepening synergistic marketing with ecosystem players within the China Resources group, such as China Resources Gas and Mixc Lifestyle.

China Resources Beer continues to adhere to its high dividend policy. In 2025, the proposed total dividend payout increased by 34.3% year-on-year to RMB 1.021 per share, with a payout ratio of 98.2% after accounting for the impairment.