China Resources Beer’s “14th Five-Year Plan” concludes: a provision of 2.8 billion yuan for Baijiu impairment, with the focus on maintaining high-end and diversified development strategies.

On March 23, China Resources Beer announced its performance for the final year of the 14th Five-Year Plan. The group’s total revenue for 2025 reached RMB 37.985 billion, a decrease of 1.68% year-on-year.

Due to a goodwill impairment of RMB 2.877 billion related to the liquor business this year, attributable net profit 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 of approximately 11.03 million kiloliters, a slight increase of 1.4% year-on-year. Gross profit margin rose to 42.5% due to premiumization and cost savings.

Among these, sales of mid-to-high-end and above beers grew to high single digits year-on-year, accounting for nearly 25% of total sales. The growth rate of standard and above products approached 10%.

Zhao Chunwu, Chairman of China Resources Beer, pointed out that China’s high-end beer market has entered the “second half.” He predicts that the industry’s product structure will gradually shift from a pyramid shape to a more balanced one. If the market size remains stable, by 2030, the scale of mid-to-high-end and above products could exceed 10 million tons, approaching one-third of the total.

Based on this, China Resources Beer maintains a “cautiously optimistic” attitude toward the industry, believing that even if economic growth slows, there is still active demand for relatively affordable alcoholic beverages.

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-premises to off-premises sales has reversed from the original 55:45, with on-premises sales even lower. In response, China Resources Beer is actively addressing the shortcomings of emerging businesses.

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

Additionally, China Resources Beer is selectively revitalizing local brands with “refined vintage” innovations. For example, the “Hailar” brand in Inner Mongolia has been redesigned in packaging and formulation to meet consumer desires for diversity and regional characteristics, positioning it above mid-to-high-end.

Compared to the steady progress of the beer business, the liquor segment faced significant challenges in 2025, with revenue dropping nearly 30% year-on-year to RMB 1.496 billion. Regarding the RMB 2.877 billion goodwill impairment that attracted much market attention, Zhao Chunwu explained that this adjustment fully considered macroeconomic factors, industry cycles, and consumption recovery.

This impairment originated from a large acquisition of Jinsha Distillery in early 2023, which generated RMB 7.421 billion in goodwill. However, Jinsha Distillery’s performance post-acquisition did not meet expectations, and the EBITDA (excluding impairment) of the liquor business plummeted 69% to RMB 264 million in 2025.

Nevertheless, management remains committed to diversification.

Zhao Chunwu emphasized that entering the liquor industry was a carefully considered second growth curve. He believes that although the liquor industry is undergoing deep adjustments, its large market size and tolerance for risk mean that “doing it may involve greater risks and pressures than not doing it, but it is an essential attempt for corporate development.”

In terms of specific strategies, President Jin Hanquan proposed a “stability” core approach: first, stabilize brands by focusing on high-end business segments like “Summary” and mass-market products like “Jinsha Hui Sha”; second, stabilize pricing by strictly controlling sales expenses and implementing digital traceability to prevent stockpiling, ensuring dealer profits; third, stabilize channels by transforming distributors from “relying on stockpiling for rebates” to “driving sales for profit.”

The highly anticipated “dual empowerment of beer and liquor” strategy is entering deeper waters.

Zhao Chunwu admitted that this strategy is still immature; the white liquor types and venues sold through beer channels are somewhat disorganized, and there is a mismatch with the company’s current three white liquor brands.

Currently, China Resources Beer is tailoring “light bottle” products suitable for beer channels based on the preferences of over 10,000 distributors. Meanwhile, the liquor business is deepening collaborative marketing within the China Resources ecosystem, including entities like China Resources Gas and Vientiane Life.

China Resources Beer continues to adhere to a high dividend payout policy, planning to increase total dividends by 34.3% in 2025, with a payout of RMB 1.021 per share, achieving a payout ratio of 98.2% after accounting for impairment.

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