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

CR Beverage Releases Its First Full Annual Report Since Listing: When Will the Operating Issue of “Walking on One Leg” Be Resolved?

On the evening of March 11, CR Beverage (02460.HK) issued a profit warning, estimating that net profit attributable to the parent company in 2025 will decrease by approximately 40% year-on-year, meaning the company’s net profit will drop from 1.637 billion yuan in 2024 to about 980 million yuan.

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

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

Water Lily / Photo

In fact, last year, the beverage industry was still 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, beer, and other categories.

In terms of revenue scale, CR 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, did its performance decline significantly?

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

A deeper issue lies in CR Beverage’s product revenue structure. For a long time, over 80% of the company’s revenue came from the bottled water segment, and the “second growth curve” has not yet truly formed.

In 2025, the bottled water market is experiencing intense “price wars” and fierce competition. Nongfu Spring’s green bottle purified water has been widely available in supermarkets nationwide; Wahaha has regained popularity, and Jinmailang has increased product distribution, with bottled water prices once returning to the “1 yuan” era. Yibao has also faced considerable impact.

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

To seek new growth points, CR 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 noticed that these new products have limited offline exposure, mainly placed in CR Beverage’s own vending machines, and are rarely seen on shelves in convenience store chains like 7-Eleven, FamilyMart, and Lawson. Currently, the 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 effectively offset the decline in core bottled water business.

Zuo Yu / Photo

Launching new products requires increased channel investment and advertising efforts. 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, CR 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 finance veteran from the “CR system.”

Gao Li previously worked at CR Venture and CR Power, served as CFO of CR Beverage from 2012 to 2020, and since January 2025 has been the General Manager of the Finance Department of CR Group. Market analysts believe that having a finance background as the new leader is beneficial for optimizing profit performance, but the issue of over-reliance on “big single products” in business still needs to be addressed.

Water Lily / Photo

Text Editor: Zuo Yu