[291 Performance] China Resources Beer Full-Year Earnings Down 29%, but Dividend Increased Instead of Decreased, Final Dividend Up 44% to 0.557 RMB per Share

China Resources Beer (00291) announced its 2025 performance. Last year, CR Beer’s net profit was RMB 3.37 billion, down 28.9% year-on-year. Although profits declined, dividends increased, with a final dividend of RMB 0.557 per share, up 43.9% year-on-year. Including the interim dividend, the total annual dividend was RMB 1.021 per share, up 34.3%, reaching a five-year high as a thank you to shareholders for their support. Excluding the impact of goodwill impairment related to the Baijiu business, CR Beer’s payout ratio increased from 52% in 2024 to 53%.

CR Beer’s high-end and above beer sales grow in single to high single digits, but the beer industry enters a volume-reduction era

During the period, revenue was RMB 37.985 billion, down 1.7% year-on-year. The beer business revenue remained roughly at RMB 36.489 billion, driven by continuous premiumization and cost savings in raw material procurement, which boosted the gross profit margin of the beer segment by 1.4 percentage points to 42.5%. After deducting gains from investment relocation agreements, asset impairment from capacity optimization, and special expenses such as one-time employee compensation and relocation costs, the pre-interest, pre-tax, depreciation, and amortization profit of the beer business was RMB 9.61 billion, up 17.4% year-on-year.

Last year, CR Beer achieved approximately 11.03 million hectoliters of beer sales, an increase of 1.4% year-on-year. The group’s high-end beer products continued to perform strongly, with sales of high-end and above beers growing in mid to high single digits, accounting for nearly 25% of total sales, while sales of premium and above beers increased by nearly 10 percentage points.

The group stated that as the beer industry enters a volume-reduction era, innovation becomes a key growth engine. CR Beer will focus on: 1) Developing mid-to-high-end beer products intensively, strengthening its premium market position; 2) Innovation-driven product development, responding to and meeting new consumer demands through personalized and diversified offerings; 3) Using the Greater Bay Area as a new growth engine, aligning with China’s economic and demographic trends to cultivate new growth regions.

Baijiu business revenue declines; industry expected to continue cyclical adjustments

In the Baijiu segment, facing deep industry adjustments and shrinking consumer demand, the second half saw structural changes and increased differentiation. The group’s Baijiu revenue was RMB 1.496 billion, down about 30% year-on-year. The group recognized RMB 2.88 billion in goodwill impairment related to Baijiu cash flow. Excluding goodwill impairment, the pre-interest, pre-tax, depreciation, and amortization profit of the Baijiu business was RMB 264 million.

The group expects the Baijiu industry to continue cyclical adjustments, with trends including more rational consumer behavior, changing consumption scenarios, increased industry concentration, price segmentation, and emerging new channels. In the short term, the industry will focus on deep adjustments and structural optimization, while in the medium to long term, it will emphasize value restructuring and growth expansion. The group will continue to strengthen its Baijiu business with a long-term approach, prioritizing scale, and improving efficiency through cost-cutting and organizational optimization, including supply chain and performance incentives. Additionally, efforts will be made to stabilize channel prices, explore new growth points, and pursue globalization strategies.