CHINA RES BEER(00291)2024-09-10 09:03Financial Performance - For the six months ended June 30, 2024, the turnover was RMB 23,744 million, a decrease of 0.5% compared to RMB 23,871 million in the same period of 2023[12]. - Profit attributable to shareholders for the same period was RMB 4,705 million, an increase of 1.2% from RMB 4,649 million in 2023[12]. - Basic earnings per share increased to RMB 1.45 from RMB 1.43, reflecting a growth of 1.4%[12]. - The interim dividend per share was RMB 0.373, up from RMB 0.287 in the previous year, representing a 30% increase[12]. - Total equity attributable to shareholders rose to RMB 36,772 million, compared to RMB 34,174 million in 2023, marking a growth of 7.6%[12]. - Consolidated net cash increased significantly to RMB 5,139 million from RMB 426 million, indicating a strong liquidity position[12]. - The current ratio improved to 0.75 from 0.70, demonstrating better short-term financial health[12]. - The Group recorded an unaudited consolidated turnover of RMB 23,744,000,000 for the first half of 2024, benefiting from the premiumisation strategy in the beer and baijiu businesses[21]. - Gross profit margin and EBITDA margin both increased by 0.9 percentage points year-on-year to 46.9% and 31.7%, respectively[21]. - Profit attributable to shareholders for the first half of 2024 amounted to RMB 4,705,000,000, representing an increase of 1.2% compared to the same period last year[21]. - Net cash from operating activities increased by 25.6% year-on-year during the reporting period[21]. - Overall beer sales volume decreased by 3.4% year-on-year to approximately 6,348,000 kilolitres, outperforming some large-scale beer companies[26]. - The Group's beer business recorded an unaudited consolidated turnover of RMB 22,566,000,000 in the first half of 2024[26]. - The average selling price of beer increased by 2.0% year-on-year, contributing to a gross profit margin increase of 0.6 percentage points to 45.8%[28]. - The baijiu business generated an unaudited consolidated turnover of RMB 1,178,000,000 in the first half of 2024, representing a year-on-year increase of approximately 20.6%[29]. - The gross profit margin for the baijiu business increased by 2.1 percentage points to 67.6% in the first half of 2024[31]. - The Group's EBIT margin for the beer business improved significantly by over 10 percentage points compared to the first half of 2019, reaching a record high of 28.3%[51]. Operational Highlights - In the Eastern region, turnover decreased by 2.1% to RMB 10,958 million, while the Southern region saw an increase of 2.6% to RMB 6,038 million[15]. - The Group aims to achieve annual turnover and profit growth while controlling capital expenditure in the second half of 2024[33]. - The Group plans to leverage its experience and resources to build competitive advantages through a dual empowerment model for its "beer + baijiu" businesses[34]. - The Group's strategy includes a comprehensive transformation from scale to quality and from traditional to modern[35]. - The Group will continue to enhance its product portfolio and create a more efficient supply chain to unlock business value and profit growth[37]. - The Group is focused on addressing industry issues in the baijiu sector through collaboration and resource integration[38]. - The Group operated 62 breweries across 24 regions in Mainland China, with an annual production capacity of approximately 19,400,000 kilolitres as of June 30, 2024[51]. - The Group has optimized its production capacity by ceasing operations at one brewery and starting operations at a new intelligent brewery in Shandong[49]. Cash Flow and Liquidity - The Group's cash and bank deposits amounted to RMB 6,517,000,000 as of June 30, 2024, with borrowings totaling RMB 1,378,000,000[61]. - The Group maintained a net cash position as of June 30, 2024, and December 31, 2023[61]. - Net cash from operating activities for the six months ended June 30, 2024, was RMB 6,012 million, an increase of 25.8% compared to RMB 4,786 million for the same period in 2023[83]. - The net cash used in investing activities was RMB 1,167 million for the first half of 2024, significantly lower than RMB 8,768 million in the same period of 2023[83]. - The company reported a net cash (used in)/from financing activities of RMB (3,827) million for the first half of 2024, compared to RMB 6,755 million in the same period of 2023[83]. Employee and Operational Costs - Employee costs for the six months ended June 30, 2024, were approximately RMB 2,882 million, consistent with the previous year[72]. - Total staff costs, including directors' emoluments, amounted to RMB 2,882 million, an increase of 3.6% from RMB 2,783 million in the previous year[109]. - The total depreciation expense for fixed assets in the first half of 2024 was RMB 686 million, compared to RMB 686 million in the same period of 2023[119]. Corporate Governance and Compliance - The interim financial information has been prepared in accordance with the applicable disclosure requirements of the Listing Rules and HKAS 34[89]. - The auditor's report for the financial statements was unqualified, indicating no significant issues were raised[91]. - The Group's financial reporting and internal control systems are overseen by the Audit Committee, ensuring reliability and compliance[157]. - The Group's risk management and internal control systems were reviewed, and no significant concerns were identified that could materially affect operations or financial reporting[157]. Environmental and Safety Initiatives - The Group completed 431 designated EHS rectification projects with a total project fund of RMB 142 million declared, focusing on major safety and environmental protection risks[173]. - In the first half of 2024, the Group conducted 62 fire safety inspections, 35 gas safety inspections, and 102 inspections on hazardous operation projects, significantly improving safety management capabilities[175]. - The Group identified and rectified 39 environmental issues during inspections of four plants in the Yangtze and Yellow River basins in the first half of 2024[186]. - The Liangshan Plant in Sichuan was certified as the Group's first carbon-neutral plant in April 2024, followed by the Bengbu Plant in June 2024[192]. - The Group's total greenhouse gas emissions were 406,000 tonnes CO2 equivalent, with a greenhouse gas emission intensity of 66.87 kg CO2 equivalent per kiloliter output[193]. - The carbon emission intensity per unit of beer products decreased by 7%, and green power accounted for 34.6% of the total energy used[193]. Market and Investor Relations - The Group's closing price on the HKD counter was HK85.16 billion as of the end of June 2024[165]. - In the first half of 2024, the Group held approximately 245 meetings with over 2,270 fund managers and analysts to strengthen investor relations[162]. - The Group's investor relations activities included online and offline presentations, enhancing communication with existing and potential investors[162]. - The Group received eight awards in the 2024 All-Asia Executive Team survey by "Institutional Investor" magazine and five awards in the 2024 Asian Excellence Awards by "Corporate Governance Asia" magazine[164].