On April 22, 2024, China Resources Beverage (Holdings) Company Limited (hereinafter referred to as “China Resources Drinks”), the parent company of China Resources Yibao, Shenzhen, Guangdong, submitted a prospectus to the Hong Kong Stock Exchange to be listed on the Hong Kong Main Board.
Link to China Resources Beverage's prospectus:
https://www1.hkexnews.hk/app/sehk/2024/106408/documents/sehk24042201883_c.pdf
Main business
China Resources Drinks is one of the earliest companies specializing in the production of packaged drinking water in China. It was formerly known as Shekou Dragon Ring, which was co-founded by Guiyang Prickly Pear Product Development Company, China Merchants Shekou Industrial Zone Water Supply Company, and Swan Asia Co., Ltd. in 1992. In 1992, the “Yibao” and “C'estbon” trademarks were transferred from Hong Kong China Merchants Development Co., Ltd. to Shekou Longhuan. In 1996, China Resources Drinks cooperated with Shekou Water Supply to operate Yibao China, and undertook the business of Shekou Longhuan.
As the founder of the packaged drinking water industry in China and the leader of China's ready-to-drink soft drink industry, China Resources Drinks is committed to providing consumers with high-quality ready-to-drink soft drink products. The company's diverse product portfolio covers the core categories of the Chinese ready-to-drink soft drink market, such as packaged drinking water, tea drinks and juice drinks. As of April 15, 2024, China Resources Drinks has a product portfolio of 13 brands, including “Yibao,” “Pure Clean,” “Honey Series,” “Holiday Series,” and “Tea with Flavors,” for a total of 56 SKUs.
According to the Insight Consulting Report, in 2023, in terms of retail sales,
China Resources Drink ranks fifth in the ready-to-drink soft drink market in China, with a market share of about 4.7%; the company's market share in core ready-to-drink soft drink categories such as tea drinks, juice drinks, and coffee drinks all rank in the top ten of the Chinese market; among them, the company ranks first in the Chinese chrysanthemum tea drink market and second in the flavored water market.
China Resources Drinks ranked second in China's packaged drinking water market in 2023, with a market share of about 18.4%; the company ranked first in the packaged drinking water market in China's six major provinces (Guangdong, Hunan, Sichuan, Hainan, Guangxi, and Hubei), and ranked in the top three in the packaged drinking water market in 17 other Chinese provinces.
China Resources Drinks ranked first in the pure drinking water market in China, with a market share of about 32.7%, nearly four times that of the second-largest companies, and more than the total retail sales of the second-to-fifth largest pure water companies. 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 drinking pure water market.
As of December 31, 2023, China Resources Drinks has 12 self-owned factories and 34 cooperative production partners across the country, engaged in the production of packaged drinking water products and beverage products.
China Resources Drinks mainly generates revenue through sales and distribution networks covering the whole country. The company has successfully cooperated with more than 1,000 distributors across the country, covering more than 2 million retail outlets in China. China Resources Drink's revenue comes from the sale of packaged drinking water products (including small-sized bottled aquatic products, medium to large bottled aquatic products, bottled aquatic products) and beverage products.
Shareholder structure
According to the prospectus, China Resources Drinks had a shareholder structure before listing,
China Resources Group holds 60% of the shares.
Plateau Consumer Fund, L.P*, holds 40% of the shares through Plateau.
* Plateau Consumer Fund, L.P's general partner is Plateau Investment Limited, wholly owned by Ms. Dong Yi; Plateau Consumer Fund, L.P's largest limited partner is Ming Yu, an indirect wholly-owned subsidiary of Bank of China (03988.HK, 601988.SH), which holds 36.8% limited partnership interests.
Directors and Executives
The board of directors of China Resources Drinks consists of 12 directors, including:
3 Executive Directors: Mr. Zhang Weitong (Chairman of the Board and President), Ms. Feng Jing, and Ms. Wu Xia (Chief Financial Officer);
5 non-executive directors: Mr. Lin Guolong, Mr. Sun Yongqiang, Mr. Xiao Ning, Ms. Cao Yue, Dr. Zhao Dian;
Four independent non-executive directors: Dr. Zhou Yongjian, Mr. Li Yinquan, Dr. Yao Yang, and Ms. Zheng Baochuan.
In addition to executive directors, executives include Vice President Wang Chengwei, Vice President, Ms. Liu Mingfang, Vice President, Mr. Yang Nan, Vice President, and Mr. Fan Yufeng.
Company performance
According to financial data, in the past 2021, 2022 and 2023, China Resources Beverage's revenue was RMB 11.340 billion, RMB 12.623 billion and RMB 13.515 billion, respectively, and the corresponding net profit was RMB 858 million, 989 million and RMB 1,331 million, respectively.
Intermediary team
China Resources Drinks's intermediary team for this IPO mainly includes: BOC International, CITIC Securities, Merrill Lynch, and UBS as co-sponsors; Deloitte as its auditors; Jingtian Gongcheng and Gao Weishen are the company's Chinese lawyers and the company's Hong Kong and US lawyers respectively; Zhong Lun and Pu Heng are its lawyers in China, Hong Kong and the US, respectively; and Insight Consulting is their industry advisors.