China Resources Beer issues profit warning

Core Viewpoint - China Resources Beer anticipates a profit decline of at least 30% in 2025 due to an impairment charge related to its baijiu business, with expected profits ranging from 2.92 billion yuan to 3.35 billion yuan ($420 million to $490 million) [1][2]. Group 1: Profit Forecast - The expected profit for 2025 represents a year-on-year decrease of approximately 29.6% to 38.6% from the 4.76 billion yuan recorded in 2024 [1]. - The anticipated decline is primarily driven by an impairment of goodwill estimated between 2.79 billion yuan to 2.97 billion yuan, linked to the acquisition of a 55.19% stake in Guizhou Jinsha Jiaojiu Winery Industry [2]. Group 2: Market Conditions - The company attributes the write-down to "softened demand" in the baijiu market and "contracted consumer demand scenarios," which have resulted in reduced spending [2]. - For the first half of 2025, China Resources Beer reported an unaudited consolidated turnover of 23.94 billion yuan, reflecting a year-on-year increase of 0.8% [3]. Group 3: Financial Performance - Unaudited EBIT for the first half of 2025 rose by 20.8% to 7.69 billion yuan, while profit attributable to shareholders increased by 23% to 5.79 billion yuan [4]. - Beer sales volumes during this period were approximately 6.48 million kilolitres, marking a 2.2% year-on-year increase [4]. - As of June 30, the company operated 62 breweries with an annual production capacity of about 19.2 million kilolitres [4].