As beer listed companies such as Tsingtao Brewery and Zhujiang Brewery successively released their 2017 results, the talk of 'recovery' has grown louder, but the abnormally high subsidies have once again sparked controversy. In fact, the beer industry's high subsidies and heavy reliance on them have persisted for years. Tsingtao Brewery and Yanjing Brewery have received subsidies exceeding 100 million yuan for nearly a decade, and this has intensified with the industry's adjustment in recent years. From 2014 to 2016, 60% of China Resources Beer's net profit came from subsidies. Bubbles have never only appeared in beer glasses. Beer performance propped up by subsidies? Recently, beer listed companies such as Tsingtao Brewery, Zhujiang Brewery, and Lanzhou Yellow River have disclosed their 2017 annual reports, with commendable performance. However, people are surprised to find that beer listed companies receive so many subsidies, and this is quite common. Tsingtao Brewery's 2017 operating revenue slightly increased to 26.277 billion yuan, with net profit of 1.263 billion yuan, up 21.04% year-on-year. Among them, Tsingtao Brewery received subsidies included in current profit and loss of up to 429 million yuan in 2017. In 2015-2016, Tsingtao Brewery received subsidies of 511 million yuan and 517 million yuan respectively, totaling 1.457 billion yuan over three years. Given its large size, it is understandable that Tsingtao Brewery receives large subsidies, but Zhujiang Brewery is even more exaggerated. In 2017, Zhujiang Brewery's operating revenue was 3.764 billion yuan, with net profit of 185 million yuan, and the subsidies it received that year reached 83.1553 million yuan, half of its net profit. Zhujiang Brewery has received relatively high subsidies in recent years, with the most striking being in 2016, when its net profit was 114 million yuan, but it received subsidies as high as 844 million yuan (with non-operating expenses of 705 million yuan). In fact, in recent years, high subsidies have always existed in the beer industry. China Resources Beer's net profits from 2014 to 2016 were 578 million yuan, 667 million yuan, and 629 million yuan respectively, while the subsidies it received during the same period were 412 million yuan, 292 million yuan, and 462 million yuan. In these three years, 60% of China Resources Beer's net profit came from subsidies. Other beer listed companies such as Yanjing Brewery also received substantial subsidies, but their reliance was slightly less. Beer listed companies controlled by private or foreign capital received fewer subsidies. Relocation, technical renovation... Subsidy sources 'show their talents' A few days ago, Tsingtao Brewery made headlines because of its high subsidies, and it probably feels a bit wronged. Tsingtao Brewery's subsidies are mainly divided into three parts: relocation compensation, tax rebates, and financial subsidies. Among them, relocation compensation accounts for the largest share. There are 19 projects involving relocation compensation for Tsingtao Brewery in 2017. These projects require large investments, so in fact, the regular subsidies Tsingtao Brewery receives are not that prominent. Zhujiang Brewery, with abnormally high subsidies, also received them due to land acquisition compensation. Perhaps Yanjing Brewery's subsidy structure better represents the normal situation in the beer industry. In 2016, Yanjing Brewery's operating revenue was 11.573 billion yuan, with net profit of 312 million yuan, and the subsidies it received that year reached 133 million yuan. Among them, enterprise development funds were 40.06 million yuan, energy-saving technical renovation funds were 21.42 million yuan, technical renovation funds were 21.39 million yuan, tax incentives were 20.44 million yuan, and financial support was 16.85 million yuan, among others. I wonder how Yanjing Brewery's technical renovation is progressing after receiving so many technical renovation subsidies. After reviewing the financial statements of beer listed companies over the years, Zebra Consumption found that companies such as Yanjing Brewery and Tsingtao Brewery have been receiving subsidies of this scale for nearly a decade. During the industry adjustment period, the proportion of subsidies in net profit has increased. To support beer companies, local governments have come up with various subsidies, and companies are also happy to use this method to 'stabilize' their performance. Otherwise, the decline during the industry adjustment period would be more severe, and the 'recovery' would not be so fast. Source: Zebra Consumption (ID: banmaxiaofei) -END-