Zhitong Finance App learned that according to the Hong Kong Stock Exchange's disclosure on April 22, China Resources Drinks (Holdings) Co., Ltd. (hereinafter: China Resources Drinks) submitted a listing application to the main board of the Hong Kong Stock Exchange, with Bofa Securities, BOC International, CITIC Securities, and UBS Group as co-sponsors.

According to the Insight Consulting Report, China Resources Drinks is one of the first companies in China to specialize in the production of packaged drinking water. It has grown to become the second-largest packaged drinking water company in China and the largest pure drinking water company in China (based on retail sales in 2023). According to the Insight Consulting Report, the retail sales of the company's “Yibao” brand of pure drinking aquatic products reached RMB 39.5 billion in 2023, making it the number one brand in the Chinese pure drinking water market.

At the industry level, China's ready-to-drink soft drink market is expected to expand to RMB 1,403.2 billion by 2028 in terms of retail sales, according to the Insights Advisory Report. The ready-to-drink soft drink market in China is relatively concentrated. In terms of retail sales in 2023, the top five companies contributed 42.6% of the market share and are expected to continue to rise.

As of the last practical date, the company mainly has a product portfolio of 13 brands, including “Yibao”, “Pure Clean”, “Honey Water Series”, “Holiday Series” and “Savory Tea”, with a total of 56 SKUs. According to the Insight Consultation Report, in 2023, in terms of regional distribution, the company's packaged drinking water products had the highest market share in the packaged drinking water market in China's six major provinces (namely Guangdong, Hunan, Sichuan, Hainan, Guangxi and Hubei). In 2023, the packaged drinking water market in these six major provinces will account for about 30% of the total packaged drinking water market in China.

On the financial side, in 2021, 2022 and 2023, China Resources Drinks achieved revenue of approximately RMB 11.340 billion, RMB 12.623 billion and RMB 13.515 billion respectively; profits during the year were approximately RMB 858 million, RMB 989 million and RMB 1,331 million, respectively.

The prospectus specifically suggests that maintaining optimal inventory levels is critical to the success of the business. As of December 31, 2021, 2022 and 2023, China Resources Drinks' inventory balances were RMB 414.1 million, RMB 588.1 million and RMB 377.4 million, respectively. In 2021, 2022, and 2023, the inventory turnover days were 19.1 days, 24.8 days, and 23.6 days, respectively. Failure to adequately manage inventory risk may result in obsolete inventory, declining inventory value, or inventory write-off. Furthermore, compared to packaged drinking water products, the company's beverage products face a higher risk of obsolescence due to their relatively short shelf life.