Q4 performance "plummets," Pearl River Beer stuck in regional dependence

Once Pearl River Beer loses its high-end market share in the competition with nationwide brewing companies, its performance will also face impacts.

Recently, Pearl River Beer disclosed its 2025 annual report. During the reporting period, the company achieved revenue of 5.88B yuan, a year-on-year increase of 2.56%; net profit attributable to shareholders was 904 million yuan, an 11.54% increase compared to the same period last year.

Wu Dian / Photo

This is a “performance report” with both profit and growth increases, but a closer look reveals many hidden concerns.

Breaking down by quarter, in the first three months of 2025, Pearl River Beer’s revenue and net profit attributable to shareholders increased by 10.7% and 29.8% year-on-year, respectively. These two indicators began to decline in the second quarter, with corresponding decreases of 4.96% and 20.18%.

The trend started to change in the third quarter. During the peak season from July to September, Pearl River Beer’s revenue declined by 1.34% year-on-year, while net profit attributable to shareholders grew by 8.2% year-on-year.

At that time, some institutions pointed out that due to the overall rainy weather in South China during the third quarter, combined with the continued weak demand for on-premises consumption, sales were under pressure. However, thanks to the continued volume growth of mid-to-high-end products represented by 97 Pure Draft, net profit still maintained growth.

But after the peak season, Pearl River Beer’s performance “plummeted.” In the fourth quarter last year, the company’s revenue growth rate continued to decline, reaching -4.69%, and net profit attributable to shareholders turned to loss, amounting to -40 million yuan.

Some market opinions believe that the fourth quarter is traditionally a slow season for beer consumption. Coupled with ongoing industry competition, Pearl River Beer had to intensify promotions and discounts to defend its domestic market share, which squeezed gross profit margins, weakened profitability temporarily, and exposed the company’s insufficient ability to withstand seasonal fluctuations.

To date, Pearl River Beer has been firmly rooted in South China, with no significant progress in nationwide expansion.

Cinda Securities once pointed out in a research report that from 2010 to 2013, the company attempted nationwide expansion, proposing the “South Fix, North Move, West Advance, East Expand” strategy. However, after 2014, as the beer industry entered a stock era, regional market competition became more stable, often requiring large investments in personnel and expenses to gain market share. As a result, the effect of the company’s nationwide strategy was limited.

From 2020 to 2024, revenue in South China accounted for about 95%, with a CAGR of 8.1%, higher than the company’s overall CAGR of 7.8%.

In 2025, Pearl River Beer achieved revenue of 5.62B yuan in South China, accounting for 95.66%; other regions contributed 255 million yuan, accounting for 4.34%.

Additionally, last year, the company’s distributors increased by 76, with 33 in Guangdong Province. By the end of the reporting period, Pearl River Beer had 1,449 distributors, but traditional channels represented by this number are already difficult to generate further growth.

Last year, revenue from traditional channels was 5.04B yuan, a decrease of 2.32% year-on-year, and revenue from nightclubs decreased by 18.44% year-on-year. Supermarket and e-commerce channels saw varying degrees of growth, especially e-commerce revenue, which increased by 342.33% to 312 million yuan. However, due to the small base, this channel contributed limited overall performance.

Sun Wanqiu / Photo

In 2025, Pearl River Beer’s beer sales volume was 1.4624 million tons, a 1.58% increase, with a ton-price of 3,888.58 yuan/ton, up 1.57% year-on-year.

High-end products represented by Pure Draft Beer and Snow Castle Beer saw revenue grow by 10.98% to 4.33B yuan, accounting for 76.2%; mid-range products mainly represented by Zero Degree Beer achieved revenue of 951 million yuan, a decrease of 23.28% compared to last year, accounting for 16.72%; popular products generated revenue of 403 million yuan, a 9.51% increase.

Certainly, the growth of high-end products has brought more profit expansion space for Pearl River Beer. During the reporting period, the company’s gross profit margin for high-end products increased by 2.22 percentage points to 50.82%, far exceeding the 36% to 37% gross profit margins of mid-range and mass-market products.

However, competition in the high-end segment is now fierce, with mainstream price-range products being the cornerstone of performance for all brewing companies, and even a focus for development in 2026.

A few days ago, at the China Resources Beer earnings conference, management explicitly stated that their high-end strategy would extend to the sub-premium segment, and the company would pay close attention to the development of shoulder products; Li Zhigang, President of Chongqing Beer, also revealed that this year they would increase efforts on 1L canned beers with higher cost-performance and more flexible drinking scenarios.

This also means that Pearl River Beer’s product structure of “strong in high-end, collapsing in mid-range, and weak in mass-market” does not align with the market trends observed by leading beer companies, and may even be somewhat unbalanced. If Pearl River Beer loses its high-end market share in the competition with nationwide brewing companies, its performance will also face impacts.

Reporter Wu Dian