Goodwill impairment of 2.9 billion yuan! China Resources Beer’s net profit is expected to drop by 30%, with the Baijiu business becoming a "drag" on performance.

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(Source: Meicai.com)

China Resources Beer expects a 29.6% to 38.6% decline in net profit by 2025, with Jinsha Liquor Group recording goodwill impairment of 2.79 billion to 2.97 billion yuan.

Text / Daily Financial Report Chu Feng

China Resources Beer’s performance has seen an unusually large decline. On the evening of March 10, the company issued a profit warning for 2025, estimating that its net profit may be between 2.92 billion and 3.35 billion yuan, a decrease of approximately 29.6% to 38.6% compared to the same period in 2024’s net profit of 4.76 billion yuan.

In response, China Resources Beer explained that the main reason was the underperformance of Guizhou Jinsha Yao Liquor Co., Ltd. (“Jinsha Liquor”), leading to goodwill impairment of 2.79 billion to 2.97 billion yuan. Previously, China Resources Beer had invested 12.3 billion yuan to acquire control of Jinsha Liquor.

Daily Financial Report notes that before China Resources Beer’s acquisition, Jinsha Liquor performed well, with revenue reaching 3.641 billion yuan in 2021; after the acquisition, Jinsha Liquor’s performance rapidly changed. Additionally, China Resources Beer invested in Jinzhi Liquor, which remains in loss. These two acquisitions reflect the difficulties China Resources faces in the Baijiu sector.

Compared to its beer business, China Resources Beer’s beer segment has shown some recovery, with mid-year revenue in 2025 increasing by 2.6% year-over-year. However, in a saturated market, its beer business also faces fierce competition, with emerging brands expanding and cross-industry brands vying for market share, raising higher demands on traditional beer brands.

Huge Goodwill Impairment Causes Performance to Drop by Nearly 30%

The large acquisition of Jinsha Liquor is significantly impacting China Resources Beer’s profits. According to the profit warning, the company expects net profit in 2025 to decline by 29.6% to 38.6%, marking one of the largest drops in recent years. The main reason is the impairment of goodwill related to Jinsha Liquor, amounting to 2.79 billion to 2.97 billion yuan.

China Resources Beer explained that the goodwill impairment mainly stems from a weak Baijiu market, shrinking consumer demand scenarios, and reduced consumption. Since acquiring control of Jinsha Liquor, its performance has long been below expectations.

Daily Financial Report notes that China Resources Beer completed the acquisition of 55.19% of Jinsha Liquor’s shares in January 2023, with a transaction value of 12.3 billion yuan, which was consolidated into its financial statements. At that time, China Resources Beer aimed to develop a “beer + Baijiu” dual-empowerment strategy.

Before the acquisition, Jinsha Liquor’s performance was impressive. The announcement showed that from 2019 to 2021, Jinsha Liquor achieved revenues of 878 million, 1.767 billion, and 3.641 billion yuan, with net profits of 156 million, 615 million, and 1.315 billion yuan respectively.

In October 2022, China Resources Beer announced plans to acquire Jinsha Liquor’s shares. By mid-2022, Jinsha Liquor’s revenue and net profit were 2.001 billion and 670 million yuan, respectively, up 14.93% and 11.72% year-over-year. Despite slowing growth, the company still maintained an upward trend.

After the acquisition, Jinsha Liquor’s performance quickly deteriorated. In 2023, revenue was 2.067 billion yuan, with pre-tax profit dropping to 130 million yuan. Compared to its 2021 peak, revenue fell by 43.23%, nearly halving.

In 2024, Jinsha Liquor’s revenue slightly increased to 2.149 billion yuan. In mid-2025, revenue was 781 million yuan, down 33.7% year-over-year; pre-interest, tax, depreciation, and amortization profit was 258 million yuan, down 42.5%.

Daily Financial Report notes that in 2025, the market price of Jinsha Liquor’s main brand “Summary” continued to decline. According to today’s liquor price data, at the end of 2025, “Summary” was priced at only 355 yuan per bottle, down from 485 yuan at the beginning of the year—a decrease of 130 yuan. Notably, the official guide price for “Summary” is 1,199 yuan per bottle.

Bold slogans, but business growth remains difficult

China Resources Beer is ambitiously entering the Baijiu sector, aiming to make Baijiu its second growth driver. However, the business has yet to yield good returns. Since Jinsha Liquor’s entry into the China Resources system, its performance has consistently fallen short of expectations, leading to multiple changes in its chairman.

The key figure behind the “beer + Baijiu” dual-empowerment strategy is Hou Xiaohai, who led the company into the Baijiu sector in 2021 by acquiring stakes in Jingzhi Baijiu, Jinsha Liquor, and Jinzhi Liquor. Hou once set a “hundred-billion” target for Baijiu business.

During Hou’s tenure as chairman, China Resources Beer’s Baijiu business showed little progress, with revenues declining. In June 2025, Hou resigned as executive director and chairman for personal reasons, leaving the company.

In February 2023, Wei Qiang was appointed General Manager of China Resources Beer and became chairman of Jinsha Liquor in February 2024. Wei also proposed a 40% performance growth target for Jinsha Liquor.

In December 2024, Wei Qiang resigned as chairman of Jinsha Liquor, replaced by Fan Shikai. Fan admitted that Jinsha Liquor could not meet the 40% growth target set at the beginning of the year and adjusted the annual revenue growth goal to 30%. Even with the lowered target, Jinsha Liquor still failed to meet expectations.

Not only Jinsha Liquor, but also Jinzhi Liquor, acquired by China Resources Beer, is in a difficult position. As early as February 2022, China Resources Beer acquired a 49% stake in Jinzhi Liquor, which doubled its stock price. At that time, Jinzhi Liquor was expected to benefit greatly from China Resources’ involvement.

However, in hindsight, Jinzhi Liquor has not achieved the expected growth under China Resources’ support and remains in loss. From 2022 to 2024, net profits were -187.1 million, -22 million, and -257.6 million yuan. Recently, Jinzhi Liquor forecasted a net loss of 150 million to 190 million yuan in 2025.

Some analysts point out that China Resources Beer’s expansion into the Baijiu sector from 2021 to 2023 coincided with a de-stocking cycle in Baijiu, with weak market demand and inverted terminal prices. For example, during Wei Qiang’s chairmanship of Jinsha Liquor, key measures included reducing distributor inventories and recovering low-priced “Summary” products.

Beer Business Rebounds, Competition for High-End Grows

China Resources Beer’s push into the Baijiu sector aims to create a second growth curve, partly because the beer industry has entered a stock-competition era. Since 2013, after peaking in domestic beer production, the industry ended over 20 years of rapid growth, approaching a protected market with limited per capita sales growth.

Product premiumization has become the main strategy for growth among beer companies. For example, in 2025, China Resources Beer’s beer revenue is expected to recover, with slower growth but higher net profit levels, indicating a focus on high-end products.

According to Daily Financial Report calculations, excluding goodwill impairment, China Resources Beer’s net profit in 2025 could reach 5.71 to 6.32 billion yuan, a 20% to 32.8% increase year-over-year. Guotai Junan Securities predicts that among high-end products, Heineken will continue to perform well, with double-digit sales growth in 2025.

As high-end beer enters a mature, stock-based market, the industry’s growth prospects are more subdued. First Capital Research reports that the beer industry has shifted from high-end driven growth to a mature stage with near-zero annual volume growth from 2025 to 2029, with slight fluctuations on the platform.

Meanwhile, craft beer is rising in the high-end market, with emerging brands increasingly eating into traditional brands’ market share. According to Qichacha data, as of August 2025, there are 7,491 craft beer-related companies in China, with 1,458 new registrations in the first seven months, a 20.8% year-over-year increase.

Guotai Haitong Research notes that demographic shifts among consumers often create opportunities for category innovation, and the domestic beer market may face a similar turning point. Craft beer remains a core trend, with current penetration at about 3%, still far below the 5-15% levels seen in Europe, America, and Australia.

In summary, China Resources Beer’s entry into the Baijiu sector at a high market cycle has resulted in investment losses, with a large goodwill impairment in 2025 causing net profit to drop by about 30%. Other Baijiu investments, such as Jinzhi Liquor, continue to perform poorly, and the “beer + Baijiu” dual strategy faces significant challenges.