produced | investment research tiger sniffing
author | Chen Xiao Yu
Recently, one of the leading domestic beer China Resources Breweries The first annual report after the acquisition of Heineken was announced. According to the financial report, the company’s total operating income in 2019 was 33.769 billion yuan, an increase of 4.02% year-on-year, and its net profit attributable to its mother was 1.312 billion yuan, a year-on-year increase of 34.29%.
The growth of China Resources Beer in 2019 is attributable to the cost control brought about by shutting down inefficient production capacity; on the other hand, it is benefited from the completion of the acquisition of Heineken, which brought in 1.139 billion yuan in revenue. Income and an annual profit of 145 million yuan. In addition, the data shows that China Resources Beer ’s sales of medium and high-end beer increased by 8.8% compared with 2018, driving the company’s overall average sales price to increase by 2.8%. This increase in volume and price also reflected the company’s revenue and net profit growth.
At present, China Resources Beer’s high-end strategy has achieved certain results.
How does China Resources Beer grow?
The high-end route of China Resources Beer has driven product sales volume and price to rise, and promoted revenue growth.
(Data source: Wind)
In 2019, China Resources Beer achieved a total revenue of 33.769 billion yuan, an increase of 4.02% over 2018.
One of the most important strategic goals of China Resources Beer in recent years is to “high-end”, and the acquisition of Heineken in 2019 is a very important step in this strategy. The company completed the acquisition of Heineken China Assets on April 29, 2019, and Heineken officially consolidated in May. During the consolidation period, Heineken contributed 1.14 billion yuan in turnover and 145 million yuan in net profit. Although Heineken currently contributes a lot to the company’s net profit, its contribution to overall revenue is still limited. After obtaining relatively complete channels from China Resources, it is expected to obtain faster sales growth.
In addition to the acquisition of Heineken, China Resources Beer’s high-end strategy in 2019 also has other actions, such as the introduction of two new high-end products: Snow Marls Green Beer and Black Lion White Beer.
In terms of annual revenue, China Resources has achieved certain results with its “high-end”. A series of actions were reflected in revenue. The company achieved 11.43 million kiloliters of beer sales, a year-on-year increase of 1.3%. Among them, the sales of mid-to-high-end products (ie Yongchuang and above) increased by 8.8%, which was significantly higher than the data of 4.8% last year, and the overall average sales price increased by 2.8% compared with 2018. In comparison, although the company’s sales price increased by 12.3% in 2018, its sales volume fell by 4.8%. This price increase is not a very healthy model for mass consumer products such as beer. Therefore, the rise in volume and price in 2019 is rare good news for China Resources, which proves that its product sales have performed well.
How profitable is CRB?
China Resources Brewery will benefit from Heineken consolidation in 2019, the net profit attributable to mothers will increase, and the tonnage price increase brought by the high-end strategy, and the costs brought by the strategy of shutting down inefficient factories Reduced, profit margins continue to increase.