On March 18, China Resources Beer (HK 00291) released its 2023 financial results, with revenue of RMB 38.932 billion, up 10.4% year-on-year, and net profit of RMB 5.153 billion, up 18.6% year-on-year.

On the afternoon of March 18, China Resources Beer held a media briefing in Hong Kong to announce its 2023 annual results. At the meeting, Mr. Hou Xiaohai, Executive Director and Chairman of the Board, stated: In 2023, China Resources Beer's premium beer sales exceeded 2.5 million tons, and Heineken® beer surpassed 600,000 tons, strongly answering the historical questions of whether China Resources Beer could build international brands and succeed in the premium segment.

New Distribution has compiled the key points of the briefing as follows.

China Resources Beer Continues High-Quality Growth

Hou Xiaohai said: "2023 was a milestone year for China Resources Beer, marked by fruitful achievements. It was the year our group entered its thirties, the year we formally entered the baijiu market, the opening year of the final three-year phase of our '3+3+3' strategy, the 150th anniversary of Heineken®, and the landmark year marking the first five years of cooperation between China Resources Beer and Heineken®."

The report shows that China Resources Beer's beer business saw overall sales volume increase by 0.5% in 2023, reaching approximately 11.151 million tons. Among this, sales of premium and above beers reached approximately 2.5 million tons, up 18.9%, continuing high growth. Products such as Heineken®, Snow Pure, Lao Xue, and Red爵 all achieved rapid double-digit growth in 2023. Notably, the Heineken® brand achieved strong growth of nearly 60% in 2023. With this, China Resources Beer successfully completed the first five-year plan since partnering with Heineken®—achieving the goal of annual sales of 600,000 tons of Heineken® beer.

In the baijiu business, in 2023 China Resources Beer completed the acquisition of 55.19% equity in Guizhou Jinsha. In 2023, Jinsha's sales revenue was RMB 2.067 billion, with earnings before interest and tax of RMB 797 million. Hou Xiaohai further stated that in 2023, China Resources Beer overcame severe industry changes and market challenges, achieving growth in overall revenue, profit, and beer sales volume. In 2024, the company will actively explore the development of its baijiu business and firmly advance the business model of "dual empowerment of beer and baijiu, and mutual growth of both white spirits."

Regarding plans for 2024, Hou Xiaohai stated: "Growth will continue to be China Resources Beer's first strategy," striving to achieve "balanced growth" in overall revenue, profit, and overall and premium-and-above beer sales volume in 2024!

Growth Strategy in a Complex Environment

2023 was a key year for China Resources Beer in advancing its "Decisive Victory in Premium" strategy. Throughout the year, the company focused on various thematic promotions and channel marketing activities to cultivate and promote key premium products such as Heineken®, Snow Pure, Lao Xue, and Red爵.

One effective outcome of promoting premium products is that China Resources Beer's product mix continued to improve, driving an overall average selling price increase of 4.0%. In terms of Chinese brand promotion, China Resources Beer enhanced brand influence through endorsements and sponsorships of sports events and variety shows, such as sponsoring multiple marathon events "Yong Bu Zhi Bu", variety shows "Let's Go Camping 2" and "Let's Have Skewers", the extreme sports event "X GAMES", and the "Honor of Kings" professional league. For international brands, China Resources Beer held a series of events in Shanghai to celebrate the 150th anniversary of Heineken®, enhancing the brand's market influence. Additionally, leveraging the UEFA Champions League, the company launched a "Champions League" themed marketing campaign and introduced its first premium non-alcoholic beer, "Heineken® 0.0".

Driven by these strategies, China Resources Beer's beer business gross margin improved by 1.7 percentage points to 40.2% in 2023, further enhancing profitability.

In the baijiu business, the main strategies in 2023 included post-acquisition integration, empowerment, and improvement of Guizhou Jinsha, focusing on four key areas: organizational restructuring and personnel selection, market order and price recovery, brand reshaping and product development, and production assurance and project advancement. Additionally, the company conducted inventory checks and delivery, inventory valuation, risk control, system construction, digital construction, EHS (Environment, Health, and Safety) rectification, internal control audits, and self-inspections, driving Guizhou Jinsha onto a path of solid foundation and strength.

In the first half of 2023, Jinsha's main strategy was "management first, externally reduce inventory and stabilize prices" to rebuild market order; internally, it focused on organizational restructuring, brand reshaping, and sales management system construction. In the second half, the focus shifted to brand building and market expansion, achieving steady performance growth. The company also continued to launch differentiated new products such as "Jing Zhi" and "Jinsha Xiao Jiang".

In terms of baijiu channel construction, the company evaluated and optimized distributors, actively addressed legacy issues, digested channel risk inventory, stabilized market transaction prices, improved product opening rates, and gradually restored channel confidence. At the same time, the company implemented a "beer-baijiu integration" strategy, strengthening the sales team, consolidating major distributors, and actively attracting high-quality beer distributors to sell baijiu products.

China Resources Beer's 2024 Holds Imaginative Potential

2024 holds extraordinary significance for China Resources Beer. It is not only the second year of the final three-year phase of the "3+3+3" strategy, but also the 30th anniversary of China Resources Snow Breweries. Looking ahead, Hou Xiaohai stated: "We will adhere to the 'Decisive Victory in Premium, Excellent Development' strategy, continue to treat growth as the first strategy, advance premium development and brand building, promote Chinese and international brands through channel marketing, further consolidate our competitive advantages in the premium segment, and enhance our competitive position through organizational transformation, excellent manufacturing, digitalization, and green low-carbon initiatives. We will continue to lead the industry and 'be the leader in the new world of beer.'"

It is worth noting that China Resources Beer stated it will continue to build the unique "beer + baijiu" dual-empowerment business model. This business model means that under one company organization, leveraging the four advantages of China Resources Beer's development experience, resources, management mechanisms, and listing platform, and utilizing the respective strengths of China Resources Beer, China Resources Snow, and China Resources Wine, a three-wheel drive is formed, achieving two-way empowerment and synergistic complementarity in organization, talent, sales, brand, supply chain, manufacturing, technological innovation, digitalization, finance, taxation, legal, and risk control, nurturing new competitive capabilities for China Resources Wine.