Click to read the original article for details. This afternoon, China Resources Beer Holdings (00291.HK), listed in Hong Kong, announced its first-half 2019 results, the first "report card" since completing the acquisition of Heineken China in April. At the results press conference held this afternoon, Foodinc noted that China Resources Beer CEO Hou Xiaohai discussed the company's plans for new products and channels, as well as the latest status of integrating Heineken China. He even stated that he hopes Heineken will "gain a market share similar to Corona" in the future. In addition, he said the company is "paying close attention" to AB InBev's potential sale of a minority stake in its Asian business. Below is Foodinc's report from Hong Kong. "Major Moves" According to the latest results announcement released today, the company achieved revenue of RMB 18.825 billion in the first half of this year, with profit attributable to shareholders of RMB 1.871 billion, representing year-on-year increases of 7.2% and 24.1%, respectively. Gross profit increased 12.7% year-on-year to RMB 7.125 billion. It is understood that China Resources Beer completed the acquisition of Heineken China on April 29 this year. "The integration of Heineken has progressed very smoothly in May, June, and July, exceeding expectations," said Hou Xiaohai. China Resources Beer CEO Hou Xiaohai He said that China Resources Beer has quickly taken over the business of Heineken China, with no major fluctuations in sales channels and personnel. At the same time, the company has begun promoting cross-selling of Heineken nationwide, with products gradually being launched in various regions across the country. The launch progress is currently going smoothly. In addition, the reception of the factories has been the most stable so far, and the next step is to continue accelerating the integration of factories and sales. First, we need to speed up market integration; second, we need to improve the quality of integration. "By introducing a series of Heineken brands, we hope that Heineken can secure the number one position in the price segment between RMB 12 and RMB 15 in the Chinese market," Hou Xiaohai further stated, expressing hope that in the future it can achieve "a market share close to that of Corona." "In the next 2 to 3 years, we will focus our main efforts on Heineken's sales occasions," Hou Xiaohai told Foodinc. Heineken has four or five products, with four main products. Currently, the company hopes to launch Heineken first. He also mentioned that this year is mainly an integration period for Heineken, and there will be "major moves" in the next two years to promote Heineken's sales nationwide. Premiumization Strategy Hou Xiaohai also stated at the meeting that one of the ultimate goals of China Resources Beer's acquisition of Heineken China is to win in the premium market and surpass competitors. "Through this cooperation, we can obtain two resources: one is Heineken's international brand resources, and the other is Heineken's current share in China's premium market and some channel resources." According to the company's results announcement, benefiting from brand reshaping and product structure upgrades, as well as the contribution from the acquisition of Heineken China, sales volume of mid-to-high-end beer increased 7.0% year-on-year in the first half, and the overall average selling price also increased 4.5% year-on-year. Hou Xiaohai said that in the future, the company hopes to build a "dual-brand portfolio" of Chinese brands and Heineken international brands to compete with international and domestic competitors, while capturing more share in the premium market in both Chinese and international brand segments. The company will further optimize and enhance the construction of premium beer consumption channels based on Snow's existing national channel network to promote the sales of premium products. "Currently, Snow Beer holds about 15% share in the premium market. Our future goal is to get very close to our main competitors, and we hope to occupy at least one-third of the premium market in the future," said Hou Xiaohai. He believes that based on Snow Beer's sales progress in the premium market over the past year or two, as well as the company's integration situation, it can be optimistically judged that Snow Beer's development in the premium market will become faster and better in the next three years. He also pointed out that Snow's current price in the premium market is not low, and the main task in the future is to increase Snow's sales volume in the premium market. Hou Xiaohai also told Foodinc that after launching the new product "Snow MARRSGREEN" in the first half, a new packaging of "Facial Mask" will be launched before the end of the year. "We believe that these four products (Jiangxin Yingzao, Super X, MARRSGREEN, and the new packaging of Facial Mask) will become the main force for Snow Beer to compete in the premium market in the next 3 to 5 years." However, Hou Xiaohai also said that there is still a considerable gap between the current situation and the company's ambitious goals. Optimization Strategy When asked by media whether the decline in employee numbers in the first half was related to the acquisition of Heineken China, Hou Xiaohai explained that the reduction in employees has nothing to do with business operations, but is one of the major strategic transformation measures of Snow Beer. He said that through ten years of acquisitions, Snow Beer has a large number of factories and employees, but employees' income levels are relatively low and their ages are relatively high. The company benchmarks against international companies and globally advanced companies, where per capita efficiency and per capita sales volume are much higher than those of Chinese beer companies. This is achieved through job optimization. However, Hou Xiaohai also pointed out that this work will basically end by the end of this year. "This work has lasted for three years, and this year is the last stop. There will be no such work in the next two years." Regarding factory optimization, he said that the progress of factory capacity optimization in the past three years has been faster than originally planned. However, in the next three years, the company will continue to optimize some factories according to plan, but the number will not be too large. Data shows that in the first half of this year, China Resources Beer ceased operations at one brewery. After completing the acquisition of Heineken China, it added three breweries. As of the end of June 2019, China Resources Beer operated 80 breweries in 25 provinces, municipalities, and autonomous regions in mainland China, with an annual production capacity of approximately 21.6 million kiloliters. On AB InBev Asia Pacific and Acquisitions Interestingly, at today's meeting, China Resources Beer's views on AB InBev's earlier sale of some businesses and the postponement of AB InBev Asia Pacific's Hong Kong IPO became a hot topic for the media. When asked how he views the postponement of AB InBev Asia Pacific's Hong Kong IPO, Hou Xiaohai frankly said that China Resources Beer has not paid much attention to this matter. "I think we should just do our own things well." Although he emphasized that the focus is on the company's own business development, Hou Xiaohai also revealed at the meeting that China Resources Beer is currently "paying close attention" to AB InBev's potential sale of a minority stake in its Asian business, and believes that "some predictions and assessments can be made." When asked about future acquisition targets, he also pointed out that looking at global premium beer brands, there are not many acquisition targets to choose from now. "(But) if there are good ones, we will consider them." Source: Foodinc (ID: foodinc)