---
title: "China Resources Beer: Expected Annual Net Profit Increase of 110% to 124% Year-on-Year"
description: "On January 26, 2022, China Resources Beer (Holdings) Company Limited (hereinafter referred to as \"China Resources Beer\") issued a profit alert, expecting its profit attributable to shareholders for the year ended December 31, 2021, to be RMB 4.4 billion to RMB 4.7 billion, an increase of 110% to 124% compared to 2020. The announcement stated that the increase was partly due to an initial after-tax compensation gain of approximately RMB 1.3 billion from a relocation compensation agreement signed on January 22, 2021, for the transfer of a piece of land, and partly due to higher gross profit from increased average selling prices and lower administrative and other expenses, offset by higher selling and distribution expenses."
author: "New Distribution"
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published: "2022-01-28"
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# China Resources Beer: Expected Annual Net Profit Increase of 110% to 124% Year-on-Year

> On January 26, 2022, China Resources Beer (Holdings) Company Limited (hereinafter referred to as "China Resources Beer") issued a profit alert, expecting its profit attributable to shareholders for the year ended December 31, 2021, to be RMB 4.4 billion to RMB 4.7 billion, an increase of 110% to 124% compared to 2020. The announcement stated that the increase was partly due to an initial after-tax compensation gain of approximately RMB 1.3 billion from a relocation compensation agreement signed on January 22, 2021, for the transfer of a piece of land, and partly due to higher gross profit from increased average selling prices and lower administrative and other expenses, offset by higher selling and distribution expenses.

On January 26, 2022, China Resources Beer (Holdings) Company Limited (hereinafter referred to as "China Resources Beer") issued a profit alert:
It is expected that the profit attributable to shareholders of the company for the year ended December 31, 2021, will be RMB 4.4 billion to RMB 4.7 billion, an increase of 110% to 124% compared to 2020.
The announcement stated that, compared to 2020, the increase was partly due to an initial after-tax compensation gain of approximately RMB 1.3 billion received from a relocation compensation agreement signed on January 22, 2021, for the transfer of a piece of land owned by the group;
Gross profit increased due to higher average selling prices of the group's products, and administrative and other expenses decreased mainly due to lower impairment losses on fixed assets and one-time employee compensation and resettlement expenses, offsetting increases in selling and distribution expenses, mainly due to higher marketing expenses and employee costs.
******China Resources Beer's Path to Premiumization**
According to Euromonitor data, from 2015 to 2020, the proportion of premium beer consumption in China increased from 7.1% in 2015 to 11% in 2020; the market share of premium beer by value increased from 24.6% in 2015 to 35% in 2020.
The battle for "beer premiumization" among giants is intensifying.
In response to this new trend, in 2017, China Resources Snow Breweries began to reshape its brand and formulated a 9-year 3x3 premiumization development strategy.
In the first three years (2017-2019), China Resources focused on organizational restructuring, brand reshaping, and capacity optimization, creating a so-called "4+4 brand portfolio," consisting of four Chinese brands: Brave the World SuperX, Mars Green, Ingenuity Creation, and Hua Lian, and four international brands: Heineken Silver, Sol, etc.
Currently, China Resources Beer is in the last year of the second three-year phase. **The theme of this three-year plan is "Decisive Battle for Premium, Quality Development," with the core being to increase premium sales volume and market share, and improve internal efficiency.**
In terms of improving internal efficiency, China Resources Beer has performed well. In the first half of 2021, the company's net profit attributable to shareholders was RMB 4.291 billion, a year-on-year increase of approximately 104.92%. This achievement is largely due to its efforts in premiumization.
In terms of sales volume and products, in the first half of 2021, China Resources Beer's premium and above sales volume reached 1 million kiloliters, an increase of 50.9% compared to the same period last year. Its "Heineken" and "Snow Mars Green Beer" both achieved double-digit sales growth.
In its premiumization layout, China Resources Beer launched the ultra-premium new "Li" in May 2021. The "Li" uses ancient recipes, organic ingredients, modern processes, and upgraded brewing; the bottle design is also unique, understated and noble, inspired by the "double-ear salamander fish bottle" from Yangshao culture, with auspicious water ripple and folded band patterns carved on the surface, a fusion of Chinese classical art.
The launch of "Li" promoted the premiumization matrix layout of China Resources Snow Breweries, led high-quality innovation in China's beer industry, helped promote the development of Chinese beer culture, and redefined China's voice in the global beer market.
In addition to "Li," China Resources Snow Breweries also launched several new products in 2021, including premium products Black Lion (#485 Rose Red Beer), Snow Small Beer Qi, and international brands Red爵 and Youshi, further enriching the product portfolio and supporting premiumization development.
Given the current development momentum, China Resources Beer has a certain advantage in its premiumization layout, but whether it can break through like Moutai remains to be seen over time.
Hou Xiaohai, who had been the general manager of China Resources Snow Breweries for 20 years, mentioned at the National Channel Partners Conference in December 2021: "We have entered a new era. In this new era, the beer industry is moving from the old world to a new world."
In the process from old to new, premiumization is the only path for the entire beer industry.
******The "Common People's Advancement" After Premiumization**
After premiumization, sub-premium products should not be underestimated.
Looking at China Resources Beer's current product structure, it has formed a brand top-level design and spiritual lineage of "top inheritance, middle innovation, bottom quality."
In the middle innovation product architecture, with the core of "inheriting from above, connecting to quality below," relying on innovative genes, it actively tries and develops new products, continuously enriching premium product combinations, flavor combinations, and brand combinations. Based on deep insights into brand marketing characteristics in the new era, it continuously breaks boundaries, actively integrates into consumer life scenarios, and connects with young consumers through heartfelt and emotionally deep communication methods.
For example, the Chinese brand Brave the World SuperX, in 2021, successively announced a new spokesperson, partnered with popular variety shows, and upgraded its packaging, launching a series of marketing moves:
On May 29, 2021, Snow Beer Brave the World SuperX officially announced brand spokesperson Wang Yibo, which immediately gained huge online attention. On the day of the announcement, the online TVC had over 50 million views, and within 24 hours, the topic #Wang Yibo Endorses Brave the World SuperX# had over 460 million reads.
While gaining online exposure, it also ignited offline exposure, with a series of actions such as large outdoor screens, thousands of terminal linkages, and fan activities, fully demonstrating China Resources Snow Breweries' strong terminal resources and rapid execution as a leading domestic beer company.
At the same time, Brave the World SuperX used the "Dance to Fight the Epidemic" full-chain marketing, seizing post-pandemic emotional needs and summer beer drinking habits, with the IP "Street Dance of China 3" as the core, achieving screen dominance through scene placement, creative mid-roll ads, and stage & prop placement, and derived the IP "Let's Hotpot" to deepen drinking scenarios.
At the 2021 Golden Rooster Business Creativity Awards, China Resources Snow Breweries' "Brave the World SuperX Dance to Fight the Epidemic," i.e., the full-chain marketing of "Street Dance of China 3," won the 14th Golden Rooster Business Creativity Gold Award for its connection of values and emotions.
It can be seen that while China Resources Beer focuses on premium products, its middle-tier products also have strong momentum.
In terms of China Resources Beer's strategic approach, premium products are the focus, and middle-tier products provide empowerment.
After all, in the top 5 competition among giants, the premium share determines whether one is a leader, a follower, or a burial.
Therefore, future premiumization competition will continue to deepen, and China Resources Beer will inevitably continue to push forward steadily with high-profile moves.
Sub-premium and above products, with premium Heineken and mid-to-high-end SuperX as key drivers, are achieving rapid growth and continuously gaining premium market share.
For industry development, China Resources Beer sees further: **Premiumization is not the result of a single company fighting alone, but a process of industry linkage and forming a community. Therefore, the product architecture needs to be stretched upward as a whole to truly become the "leader of the new beer world."**
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