Beer Board noted that China Resources Breweries announced on the Hong Kong Stock Exchange on August 26 that it intends to enter the liquor business in China through investment in Shandong Jingzhi Baijiu Co.
In the announcement, China Resources Breweries said that after considering the current market conditions and the board’s forecast on the future development of the domestic alcoholic beverage market in China, the board has resolved to enter the Chinese liquor business by investing in the business of a well-known and long-established brewing company located in China’s Shandong Province.
It was disclosed that on August 26, China Resources Wine Holdings Limited, a subsidiary of the Company, entered into an agreement with Shandong Jingzhi Baijiu Company Limited and Shandong Jingzhi Wine Company Limited about the proposed investment by Wine Holdings in the Target Company by way of capital injection. The exact amount of the investment will be implemented concerning the valuation carried out on the Target Company.
According to the industry media Cloud Wine Headlines, the two sides held a cooperation signing ceremony on the 26th. The two sides will start extensive business cooperation in the brewing, distribution and promotion of liquor in the future.
For its part, China Resources Liquor said that Jingzhi’s leading position in the field of Zhizhi spirits, as well as sales that are on par with or even exceed those of some second-tier listed liquor companies, are evidence of its development potential. The strong cooperation between the two parties will significantly promote the rapid growth of the Jingzhi brand and its liquor category while also bringing significant support and convergence to China Resources Breweries’ current channel network, helping to increase the profitability of Snowflake customers and promoting the growth and improvement of the business team, thus achieving “double empowerment.”
China Resources Breweries also noted that the joint venture will be primarily engaged in the brewing, distribution and promotion of liquor in China. Upon completion of the investment, the joint venture is expected to become the sole operating entity of Jingzhi’s liquor business.
Jingzhi is a representative of domestic sesame-flavoured liquor. Its original major shareholder is Jingzhi Group, whose major shareholder is Weifang Anqiu State Capital, and in 2017 Anqiu Zhongren became the first significant shareholder holding 46.79%, while Anqiu Zhongren was established mainly by Jingzhi’s executive team; the second major shareholder is an internal employee shareholding with 25.8%; and Shandong Jingzhi Group Co. The ratio is 17.85%.
On August 18 this year, China Resources Breweries announced its results for the first half of 2021, achieving revenue of 19.63 billion yuan, up 12.8% year-on-year; net profit of 4.29 billion yuan, up 106.4% year-on-year.
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