China Resources Beverage Issues Warning: Net Profit Decreased by 40% Last Year

China Resources Beverage Releases Its First Full Annual Report Since Listing—When Will the Operating Issues of “Walking on One Leg” Be Resolved?

On the evening of March 11, China Resources Beverage (02460.HK) issued a profit warning, estimating a roughly 40% year-over-year decrease in net profit attributable to shareholders in 2025. This means the company’s net profit will drop from 1.637 billion yuan in 2024 to approximately 980 million yuan.

This is the first full annual report since China Resources Beverage went public. Its performance sharply contrasts with the three consecutive years of double-digit profit growth before listing, and market feedback on the earnings forecast has been quite direct.

At the opening of trading on March 12, China Resources Beverage’s stock price fell as much as 3.88%, closing at HKD 10.03, with a market capitalization of HKD 24.05 billion. Compared to the company’s first trading day (HKD 39.762 billion), the market value has shrunk by over HKD 15 billion in less than a year and a half.

Shui Furong / Photo

In fact, last year, the beverage industry was relatively prosperous within the entire consumer sector. According to brokerage reports, the overall growth rate of the soft drink market was in the mid-to-high single digits, outperforming liquor and beer.

In terms of revenue scale, China Resources Beverage ranks among the top five listed companies in the beverage industry. Its core brand “Yibao” is the second-largest packaged drinking water brand by market share, only behind Nongfu Spring.

Why, despite being in a growth industry and a leading company, has performance declined significantly?

China Resources Beverage attributes the decline to continued pressure on the packaged water business in 2025, with growth not meeting expectations; the company has actively increased marketing efforts, adjusted product structures, and promoted channel reforms as part of its medium- and long-term planning, which affected profit margins.

A deeper issue lies in the company’s revenue structure. For a long time, over 80% of its revenue has come from the packaged water segment, and the “second growth curve” has yet to truly form.

In 2025, the “price war” in packaged water is intensifying, with fierce market competition. Nongfu Spring’s green bottle purified water has been widely distributed across supermarkets nationwide; Wahaha has regained popularity, and Jinmailang has increased product distribution. The bottled water price has once again approached the “1 yuan” era, which has significantly impacted Yibao.

This pressure is reflected in the financial reports. In the first half of last year, China Resources Beverage’s beverage water segment revenue was HKD 5.251 billion, down 23.1% year-over-year. Revenue from small-sized bottled water fell by 26% to HKD 3.19 billion, dragging down overall company performance.

To seek new growth points, China Resources Beverage has entered the tea, juice, and sports drink markets, launching products such as “Zhiben Qingrun” herbal tea, “Honey Water Series” juices, and “Magic” sports drinks.

However, the reporter notes that these new products have limited exposure in offline channels, mainly placed in Yibao’s own vending machines. They are rarely seen on shelves in convenience store chains like 7-Eleven, FamilyMart, and Lawson. Currently, sales performance of these new products is average; last year’s first-half revenue from them accounted for only 15% of the company’s total, insufficient to offset the decline in core packaged water business.

Zuo Yu / Photo

Launching new products requires increased channel investment and advertising. Last year, the company’s sales expenses in the first half reached HKD 1.884 billion, accounting for 30.36% of total revenue, a relatively high level.

At this critical juncture of performance pressure, China Resources Beverage has made leadership adjustments.

Earlier this year, the company’s former chairman Zhang Weitong stepped down due to work adjustments, and was succeeded by Gao Li, a veteran from China Resources with a background in finance.

Gao Li previously worked at China Resources Venture and China Resources Power. From 2012 to 2020, he served as CFO of China Resources Beverage. Since January 2025, he has been the General Manager of the Finance Department of China Resources Group. Market analysts believe that having a finance background helps optimize profit performance, but the company still needs to address its “big single product dependence” issue.