Click 'Read Original' for details. Tibet 5100 glacier water, priced higher than Evian, once derived 90% of sales and 80% of revenue from railway channels. After losing the China Railway contract, its performance has been mediocre. Tibet Water Resources' 2018 interim report shows revenue of 447 million yuan, down 2% year-on-year, and sales volume of 59,200 tons, down 4%. Two years ago, the company launched a multi-brand strategy, introducing mid-to-low-end water products Gesangquan and Zhuomaquan; on the other hand, it increased investment in high-end barley beer to alleviate performance pressure from water products. However, current sales volume cannot fully cover existing capacity. In 2017, water product sales of 72,000 tons and beer sales of 56,600 tons accounted for only 24% and 28.3% of respective capacity. Multi-brand strategy Tibet 5100 glacier water has been the core product of Tibet Water Resources (01115.HK). Its rise relied on the railway channel with strong distribution capabilities. In 2007, Tibet Water Resources (formerly "Tibet 5100 Water Resources") established a cooperation with China Railway Express. Net profit increased from 11.9 million yuan in 2007 to 115 million yuan in 2010. At its peak, Tibet 5100 glacier water held a market share of 28.5%, ranking first in the domestic market. From 2011 to 2013, China Railway Express purchased 75,000 tons of 328ml bottled mineral water annually from Tibet Water Resources. Tibet Water Resources offered a buy-one-get-one-free deal, shipping 150,000 tons to China Railway Express each year. From 2008 to 2013, Tibet Water Resources' revenue grew 6 times and net profit grew 40 times. In 2013, gross margin exceeded 70%. At its peak year, nearly 90% of bottled water was sold to China Railway Express. According to Zebra Consumption statistics, from the first purchase in 2008 to suspension in 2015, China Railway Express invested a total of 1.592 billion yuan in purchasing Tibet glacier water. After China Railway Express, Tibet Water Resources signed sales agreements with Air China, Sinopec, and China Post, and established strategic cooperation with CCB International, ICBC International, and Moutai Group. In early 2016, Tibet 5100 was renamed Tibet Water Resources, aiming to downplay the 5100 brand. Subsequently, it launched mid-to-low-end water products Zhuomaquan and Gesangquan; the former entered Sinopec gas station channels; and it cooperated with China Railway Express again, with Gesangquan sold on high-speed trains. At the end of 2017, Tibet Water Resources acquired 35% of Tiandi Green for 534 million yuan, making it a wholly-owned subsidiary. Tiandi Green focuses on high-end barley beer, which is seen as another product to alleviate performance pressure from water products. In addition to mineral water and beer businesses, the company added two revenue streams: preform and cap sales, and leasing of bottled water production lines. In 2015, these contributed 51.797 million yuan in revenue. In 2017, water business revenue was 465 million yuan, of which preform and cap sales and leasing of bottled water production lines contributed 100 million yuan and 2.05 million yuan respectively; beer revenue was 362 million yuan. It is noteworthy that the average selling price of water products dropped from 7,657 yuan/ton in 2016 to 6,859 yuan/ton in the first half of 2018, while gross margin fell from 69% to 62% during the same period. Over 70% of capacity idle In 2011, Tibet Water Resources listed on the Hong Kong Stock Exchange and used 30% of raised funds to expand capacity. Plans included expanding 330ml PET bottled water capacity by 100,000 tons, building a 20,000-ton annual capacity 330ml glass bottled water line, and constructing an 80,000-ton annual capacity 1.5L glass bottled water production facility. The 2017 annual report shows that water product and beer capacity were 300,000 tons and 200,000 tons respectively, while sales volumes were 72,000 tons and 56,600 tons, representing 24% and 28.3% of capacity, meaning over 70% of capacity was idle. The large idle capacity is mainly due to market reasons. From the company's product structure, the core product 5100 glacier water focuses on the domestic high-end water market; Zhuomaquan relies mainly on Sinopec gas station channels, priced at about 2 yuan; Gesangquan relies mainly on China Railway Express sales on high-speed trains. The 2018 interim report shows that 5100 glacier water revenue increased 3% year-on-year, Gesangquan revenue decreased 28%, and beer revenue fell 4%. The growth in 5100 glacier water sales is mainly due to expansion in markets such as Hong Kong; Gesangquan, launched less than 2 years ago, is priced in the 3-4 yuan range, facing intense competition; beer sales revenue 90% comes from the Tibet region, with limited expansion outside. Additionally, rising raw material costs and changes in customer structure affect product sales and gross margins. Water product gross margin fell 4% year-on-year, while beer remained flat. Overall gross margin decreased 3% year-on-year, from 60% in the first half of 2017 to 57% in the first half of this year. Source: Zebra Consumption (ID: banmaxiaofei) October 23-24, during the Autumn Sugar and Wine Fair, New Distribution will host the "2018 FMCG City Distribution Logistics Conference" . We will invite industry experts, FMCG warehousing and distribution specialists, and distributors transitioning to unified warehousing and distribution platforms to discuss and answer questions on future trends in FMCG city distribution logistics and practical cases of distributor transformation, hoping to bring you new insights and inspiration! Conference Time October 23-24, 2018 Conference Venue Hunan·Changsha Gaoqiao International Commodity Exhibition and Trade Center Conference Content October 23, Day 1 Sub-venue: "2018 Changsha Regional King Development Alliance Conference" 8:00-17:00 Focus on regional major distributor resource sharing, leading the S2B2C new business era October 23, Day 1 Evening 18:30-21:00 Private board closed-door exchange dinner (VIP) October 24, Day 2 Morning Main Venue: "2018 China FMCG City Distribution Logistics Conference" 9:00-9:20 Ren Xiaodong, Secretary-General of FMCG Association and Partner of New Distribution: Launch and speech on China FMCG City Distribution Alliance project 9:30-9:50 Zhao Bo, Founder of New Distribution: Same-city logistics: the most effective transformation path for distributors 9:55-10:15 Wang Qi, CEO of Weijie City Distribution: "Following the Rhythm of Commercial Flow, Seizing Platform Construction" 10:20-10:40 Chen Siting, CEO of Wanchaobang: "New City Distribution is a Key Link in Supply-Side Reform" 10:45-11:05 Xu Yonggang, CEO of Maideline: "Differences Between Traditional Warehousing and Digital Warehousing" 11:10-11:30 Mu Wei, CTO of Zhoupu Software: "Technology-Driven Efficiency Improvement in Unified Warehousing and Distribution" 11:35-12:05 Roundtable Forum: City Distribution, What Should We Earn? (Yishang Logistics, Gongwu Logistics, Kaidongyuan, Yun Cang Pei, Chengpu Logistics) October 24, Day 2 Afternoon Main Venue: 14:00-14:20 Sheng Yan, Yijia Logistics 14:25-14:45 Wang Jianjiang, CEO of Hailian Tianxia 14:50-15:10 He Yan, Fengwang 15:15-15:35 Zhong Shuo, CEO of Wangcang 15:40-16:00 Rong Jun, CEO of Jiangsu Huashang City Distribution 16:05-16:25 Lu Lixin, Gongwu Logistics 16:30-16:50 Roundtable Forum: How to Break Through When Distributor Peers Don't Enter Warehouses? Distributor transformation representatives: Shandong Yunbang Logistics, Hubei Pengdun Meiyitian, Heilongjiang Sanxing Lian'gou, Jiangsu Huashang City Distribution, Hebei Wulian Yuncang List of Participating Companies In no particular order Hunan Zonglan Diandan Network Technology Co., Ltd. Jingbang (Wuhan) International Freight Forwarding Co., Ltd. Mengniu Dairy Qinghai Hanxiang E-commerce Co., Ltd. Unilever Services (Hefei) Co., Ltd. Shanghai Branch Huicong Hunan Xuan'ang Food Co., Ltd. Guangzhou Tongdaoren Information Technology Co., Ltd. Qingdao 888 Trading Co., Ltd. Uni-President Enterprises (China) Investment Co., Ltd. Hunan Province Zhongxiang Gongpei Logistics Co., Ltd. Shenglong Ingredients COSCO Shipping Logistics Warehousing and Distribution Co., Ltd. Guangxi Yongpai Wine Industry Co., Ltd. Shangqiu Kangrong Trading Co., Ltd. Jinan Dingzhong Economic and Trade Co., Ltd. Liaoning Bimai Agricultural Technology Co., Ltd. Kunming Xiongjia Trading Co., Ltd. Shaanxi Houheng Trading Co., Ltd. Guangzhou Dingwo Enterprise Information Consulting Co., Ltd. Shaodong Jiajiale Commercial Firm Boda Trading Industrial Bank Changsha Branch Wuhan Muchen Convenience Store Chain Co., Ltd. Fujian Fuxing Yuncang Logistics Co., Ltd. Guizhou Yilimi E-commerce Co., Ltd. Jiangxi Xiao Laoer E-commerce Co., Ltd. Jinshankoufu Shanxi Taihang Yuanjing Supply Chain Management Co., Ltd. Shanxi Dezhun Supply Chain Management Co., Ltd. Shaoyang Tongdeli Trading (Xiangbang Logistics) Huanfu Tongda Express City Distribution Beijing Xinjingxiang Food Co., Ltd. Wuhan Huizhong Tianhong Wine Industry Co., Ltd. Changsha Paide Biotechnology Co., Ltd. Chao'an Tuqiang Guizhou Yihe Bopin Supply Chain Management Co., Ltd. Jiangxi Kang'en Industrial Development Co., Ltd. Xiangtan County Yisuhe Town Yuhua Paper Store Luoyang Yuanlang Trading Co., Ltd. Tongchuan Yaozhou District Huayuan Supermarket Co., Ltd. Hunan Yongfu Jiujiu Trading Co., Ltd. Zhejiang Chengchengtong Logistics Co., Ltd. Chongqing Kaiguo Materials Trading Co., Ltd. Beijing Xianmaixianmai Data Technology Co., Ltd. Hanchuan Qixing Trading Co., Ltd. Tongxin Jiuzhiru Trading Co., Ltd. Guizhou Meiguo Guoguo Network Technology Co., Ltd. ...... Distributor Transformation Representatives (Proposed) In no particular order Rong Jun, Chairman of Jiangsu Huashang City Distribution Network Co., Ltd. Wang Bo, Chairman of Hubei Yijiaren Logistics Co., Ltd. Jiang Shuming, General Manager of Sichuan Chengdu Xingrenxing Trading Co., Ltd. Liu Jichen, Chairman of Shandong Yunbang Warehousing and Logistics Co., Ltd. Tu Mingyu, Chairman of Chongqing Lingyu Consumer Goods Supply Chain Management Co., Ltd. Yang Su, Chairman of Guangzhou Zhongshan Wanrong Marketing Co., Ltd. Yuan Xia, Chairman of Sichuan Bajie Supply Chain Management Co., Ltd. Li Qiangyun, Co-founder of Hubei Pengdun Meiyitian Supply Chain Management Co., Ltd. Zhang Jianyong, Chairman of Henan Xuchang Jiulegou E-commerce Co., Ltd. Ma Haichao, Founder of Hebei Changyi Logistics Co., Ltd. Meng Yucun, General Manager of Hebei (Chengde) Wulian Yuncang Co., Ltd. Zhang Xun, Chairman of Xinjiang Urumqi Su'an Jinchi Logistics Co., Ltd. Zhang Hailing, Chairman of Jilin Sanxing Lian'gou Qiang Huitao, Founder of Hebei Dunjie Supply Chain Management Co., Ltd. Liao Lei, General Manager of Hunan Damei Supply Chain Management Co., Ltd. ...... Registration Method Registration channel is open. 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