China Resources Beer’s 14th Five-Year Plan Completion: Recognized 2.8 billion yuan in Baijiu impairment, with no change in the direction of premiumization and diversification

Question AI · China Resources Beer’s liquor business impairment of 2.8 billion, what are the deeper reasons behind it?

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

Due to a goodwill impairment of RMB 2.877 billion for the liquor 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 performed steadily, with sales of approximately 11.03 million kiloliters, a slight year-on-year increase of 1.4%. The gross profit margin rose to 42.5% due to premiumization and cost savings.

Among them, the sales of mid-to-high-end and above beers increased by double digits year-on-year, accounting for nearly 25% of total sales, with the growth rate of premium products approaching 10%.

China Resources Beer Chairman Zhao Chunwu pointed out that the premiumization of Chinese beer has entered the “second half.” He predicts that the industry’s product structure will gradually shift from a pyramid shape to a balanced one. If the overall market remains stable, by 2030, the scale of mid-to-high-end 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 toward the industry, believing that even if economic growth slows, there is still active space for the consumption of relatively low-priced alcoholic beverages.

The shift in channel focus has become a focal point for management.

Zhao Chunwu mentioned that due to the impact of the pandemic on the catering industry, the ratio of on-trade to off-trade has reversed from the original 55:45, with the on-trade proportion even lower. In response to this trend, China Resources Beer is fully committed to addressing the shortcomings in emerging businesses.

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

In addition, China Resources Beer has begun to selectively “revive” local brands, implementing “refined retro” innovations. For example, for the Inner Mongolia market, the “Hailar” brand has been repositioned through redesigned packaging and liquor body to meet consumer desires for diversity and regional characteristics, positioning it in the mid-to-high-end category.

Compared to the steady advancement of the beer business, the liquor business faced significant challenges in 2025, with revenue nearly dropping by 30% year-on-year to RMB 1.496 billion. In response to the highly scrutinized RMB 2.877 billion goodwill impairment, Zhao Chunwu explained that this treatment fully considered macroeconomic conditions, industry cycles, and consumer recovery factors.

This impairment stems from a massive acquisition of Jinsha Distillery at the beginning of 2023, which generated RMB 7.421 billion in goodwill. However, the performance of Jinsha Distillery after the acquisition did not meet expectations, with the EBITDA (excluding impairments) of the liquor business plummeting by 69% year-on-year to RMB 264 million in 2025.

However, management remains steadfast in its diversification strategy.

Zhao Chunwu emphasized that entering the liquor market was a second growth curve choice made after “careful consideration.” He believes that although the liquor industry is undergoing a deep adjustment period, its market size is large, and there is ample room for error. “Doing is riskier than not doing, but for the development of the enterprise, it is an essential attempt.”

In terms of specific operational strategies, President Jin Hanquan proposed a core direction of “stability”: first, stabilize the brand, focusing on the high-end business “summary” and the mass market “Jinsha Huisha”; second, stabilize pricing, by strictly controlling sales expenses and using digital traceability to prevent stockpiling, ensuring distributor profits; third, stabilize channels, promoting a transition for distributors from “earning rebates by stockpiling” to “earning profits by sales.”

The highly anticipated “dual empowerment strategy for beer and liquor” is stepping into deeper waters.

Zhao Chunwu admitted that the current strategy is still not mature enough, as the liquor flavors and venues sold through the beer channel are somewhat chaotic, and there is still a gap in compatibility with the company’s three liquor enterprises.

Currently, China Resources Beer is creating “light bottled liquor” suitable for the beer channel based on the willingness of over 10,000 distributors. At the same time, the liquor business is deepening collaborative marketing with entities within the China Resources system, such as China Resources Gas and Vanke Life.

China Resources Beer continues to adhere to a high dividend policy, planning a total dividend amount in 2025 to increase by 34.3% year-on-year, with a dividend of RMB 1.021 per share, and a payout ratio reaching 98.2% after accounting for the impact of impairments.