China Resources(Holdings)Co.,Ltd.

China Resources Beer climbs 5% on signs of upturn

Time:2017-03-31Source:Nikkei Asian Review21 March 2017)

HONG KONG -- China Resources Beer Holdings' 6% net profit drop in 2016 did not deter eager investors Tuesday, who flocked to the brewery's shares on signs of improvement in the beer business.

China's largest brewery said midday that net profit slipped to 629 million yuan ($91.3 million) for the year ended in December, hit by atypical summer weather and heavy advertising and promotion costs. But investors apparently found cause for optimism: The shares climbed as high as 18.90 Hong Kong dollars before closing up 5% at HK$18.66, despite dipping slightly following the announcement.

Sales climbed 2.6% to 28.69 billion yuan, fueled by a 0.3% rise in beer sales volume to 11.71 million kiloliters and a 2.3% increase in average sales price. Mid- to high-end offerings performed better thanks to a revamping of the brewer's product mix, and "performance was better than the industry average" in volume terms, according to China Resources Beer.

This year, the brewery aims to further improve efficiency, such as by reviewing sales channels, CEO Hou Xiaohai told a news conference.

The Chinese company last year dissolved a joint venture with SABMiller of the U.K., which has been acquired by Belgium's Anheuser-Busch InBev. Now, China Resources Beer is weighing options for acquisitions and tie-ups with companies in China and abroad, Hou said.Nikkei Asian ReviewMar 22, 2017