China Resources Beer wraps up 14th Five-Year Plan: Sets aside 2.8 billion for liquor impairment, high-end and diversification strategies unchanged

March 23, China Resources Beer released its final report card for the "14th Five-Year Plan." In 2025, the group achieved a total revenue of RMB 37.985 billion, a year-on-year decrease of 1.68%. Due to a goodwill impairment of RMB 2.877 billion for the baijiu business this year, profit attributable to shareholders was RMB 3.371 billion, down 28.87% year-on-year. In 2025, China Resources Beer’s beer business performed steadily, with sales volume reaching about 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 them, sales volume of sub-premium and above beer grew year-on-year by mid to high single digits, now accounting for nearly 25% of total sales. Growth rate of premium and above products approached 10%. Chairman Zhao Chunwu pointed out that the premiumization of China’s beer has entered the "second half." He predicted that the industry’s product structure will gradually shift from a pyramid shape to a balanced one. If the total market remains stable, by 2030, the scale of sub-premium and above products in the industry may exceed 10 million tons, close to one-third of the total. Based on this outlook, China Resources Beer maintains a “cautiously optimistic” attitude toward the industry, believing that even if economic growth slows, consumption of alcoholic beverages with relatively low prices still has room to be active. The shift in channel focus is now a key management concern. Zhao Chunwu mentioned that due to the impact of the pandemic on the catering industry, the ratio of on-premise to off-premise consumption has reversed from the original 55:45, with the on-premise share now even lower. Facing this trend, China Resources Beer is working hard to address weaknesses in its emerging businesses. According to management, the group's online business, including e-commerce and instant retail, is growing rapidly, with instant retail seeing annual growth of over 50% in recent years. In the future, the company will invest more resources in cultivating new business formats and matching with innovative product matrices. In addition, China Resources Beer has begun selectively “reviving” local brands for “refined retro-style” innovation. For example, the “Hailar” brand aimed at the Inner Mongolia market, is being repositioned above sub-premium with redesigned packaging and product to meet consumer demand for diversity and regional特色. Compared to the steady progress of the beer business, the baijiu business faced major challenges in 2025, with revenue dropping nearly 30% year-on-year to RMB 1.496 billion. Regarding the RMB 2.877 billion goodwill impairment highly watched by the market, Zhao Chunwu explained that this treatment fully considered macroeconomics, industry cycles, and consumption recovery factors. This impairment stems from a massive acquisition of Jinsha Liquor at the beginning of 2023, which generated RMB 7.421 billion in goodwill at the time. However, Jinsha Liquor’s performance post-acquisition did not meet expectations, and in 2025, EBITDA (excluding impairment) for the baijiu business plunged 69% year-on-year to RMB 264 million. Nevertheless, management remains committed to the diversification strategy. Zhao Chunwu emphasized that entering the baijiu industry was chosen as a second growth curve after “careful assessment.” He believes that although the baijiu sector is now in deep adjustment, its market size is large and tolerance for error is high. “Doing it may bear more risks and pressure than not doing, but for the company’s development, it’s an essential attempt.” In terms of operational strategies, President Jin Hanquan proposed focusing on “stability”: first, stabilizing brands, focusing on the premium business-focused “Zhaiyao” and mass-market “Jinsha Huisha”; second, stabilizing prices, by strictly controlling sales expenses and digital tracing to prevent inventory hoarding, ensuring distributor profits; third, stabilizing channels, pushing distributors to transition from relying on inventory hoarding for rebates to earning profits from actual sales. The much-watched “beer and baijiu dual empowerment” strategy is entering deep waters. Zhao Chunwu admitted that this strategy is still immature, with the baijiu flavor and venues sold through beer channels being messy and not yet well matched with the group’s three baijiu companies. Currently, China Resources Beer is working to develop "clear bottle" baijiu products suitable for beer channels, based on the preferences of its over ten thousand distributors. Meanwhile, the baijiu business is also deepening synergistic marketing within the China Resources ecosystem, such as with China Resources Gas and Mixc Lifestyle. China Resources Beer continues its high dividend policy, planning a total dividend payout in 2025 up 34.3% year-on-year, at RMB 1.021 per share, with a payout ratio reaching 98.2% after accounting for impairment. Risk Disclaimer The market has risks, investment should be cautious. This article does not constitute personal investment advice and has not taken into account special investment objectives, financial situations, or needs of individual users. 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