On September 25, 2024, China Resources Beverage (Holdings) Company Limited (hereinafter referred to as 'China Resources Beverage'), the parent company of Guangdong Shenzhen Yibao, disclosed its prospectus after the hearing on the Hong Kong Stock Exchange, or will soon be listed on the main board of the Hong Kong stock Exchange. It had previously submitted the application on April 22, 2024.
China Resources Beverage's prospectus link after the hearing:
https://www1.hkexnews.hk/app/sehk/2024/106408/documents/sehk24092501667_c.pdf
Main Business
China Resources Beverage is one of the earliest companies in China specialized in producing packaged drinking water. It was formerly known as Shekou Longhuan jointly established by Guizhou Prickly Pear Product Development Company, China Merchants Shekou Industrial Zone Water Supply Company, and Huanya Co., Ltd. in the 1980s. 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 Beverage cooperated with Shekou Water Supply to operate Yibao in China, taking over the business of Shekou Longhuan. In 1999, Yibao China became a wholly-owned subsidiary of China Resources Beverage.
As a pioneer in the Chinese packaged drinking water industry and a leading company in the Chinese ready-to-drink soft drink industry, China Resources Beverage is committed to providing consumers with high-quality ready-to-drink soft drink products. The company's diverse product portfolio covers core categories of the Chinese ready-to-drink soft drink market, such as packaged drinking water, tea beverages, and juice beverages. As of September 18, 2024, China Resources Beverage has a product portfolio of 13 brands including 'Yibao,' 'Zhibenqingrun,' 'Mishui Series,' 'Holiday Series,' and 'Zuoweichashi,' totaling 59 SKUs.
According to the Zhoushi Consulting report, in 2023 based on retail sales,
China Resources Beverage ranked fifth in China's ready-to-drink soft drink market by retail sales in 2023, with a market share of approximately 4.7%. The company's market share in core ready-to-drink soft drink categories such as tea beverages, juice beverages, and coffee beverages ranks among the top ten in the Chinese market. Among them, the company ranks first in the Chinese chrysanthemum tea beverage market, and second in the flavored water market.
China Resources Beverage ranked second in China's packaged drinking water market in 2023, with a market share of approximately 18.4%. The company ranks first in the packaged drinking water markets of six major provinces in China (Guangdong, Hunan, Sichuan, Hainan, Guangxi, and Hubei), and among the top three in the packaged drinking water markets of another 17 provinces in China.
China Resources Beverage ranks first in China's drinking purified water market, with a market share of approximately 32.7%, nearly four times that of the second-largest enterprise, and exceeds the total retail sales of the second to fifth purified water companies. The company's 'Yi Bao' brand purified water had retail sales of RMB 39.5 billion in 2023, making it the first brand in China's purified water market.
As of April 30, 2024, China Resources Beverage has 13 self-owned factories already in production nationwide, as well as 31 cooperative production partners, engaged in the production of packaged drinking water products and beverage products.
China Resources Beverage mainly generates revenue by selling products through a nationwide sales and distribution network. The company has successfully cooperated with over 1,000 distributors across the country, covering over two million retail outlets in China. China Resources Beverage's revenue comes from the sale of packaged drinking water products (including small bottled water products, medium and large bottled water products, barrelled water products) and beverage products.
Shareholder Structure
According to the prospectus, in the shareholder structure of China Resources Beverage before going public,
China Resources Group, holding 60%.
Plateau Consumer Fund, L.P*, holds 40% through Plateau.
* The general partner of Plateau Consumer Fund, L.P. is Plateau Investment Limited, indirectly wholly owned by Ms. Dong Yi; the largest limited partner of Plateau Consumer Fund, L.P. is Ming Yu, an indirect wholly-owned subsidiary of Bank of China (03988.HK, 601988.SH), holding 36.8% of the limited partnership interests.
Board of directors and executives
Huawei Beverage's board of directors is composed of 12 directors, including:
3 executive directors: Mr. Zhang Weitong (Chairman of the Board), Mr. Li Shuqing (President), 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;
4 independent non-executive directors: Dr. Zhou Yongjian, Mr. Li Yinquan, Dr. Yao Yang, Ms. Zheng Baochuan.
Apart from the executive directors, the management team includes Mr. Wang Chengwei, Vice President, Mr. Yang Nan, Vice President, Mr. Fan Yufeng, Vice President.
Corporate Performance
Financial data shows that in the past four years of 2021, 2022, 2023, and the first four months of 2024, the revenue of China Resources Beverage was RMB 11.34 billion, 12.623 billion, 13.515 billion, and 41.50 billion respectively, with the corresponding net profits of RMB 0.858 billion, 0.989 billion, 1.331 billion, and 4.61 billion.
Intermediary Team
The intermediary team for the IPO of China Resources Beverage mainly includes: BOC International, Citic Securities, Merrill Lynch, and UBS Group as its joint sponsors; Deloitte as its auditor; Jointly Tian Gong Cheng, Cadwalader, and Clifford Chance respectively as its company's Chinese lawyers, Hong Kong, and U.S. lawyers; Zhong Lun, Pu Heng respectively as its brokerage Chinese lawyers, brokerage Hong Kong, and U.S. lawyers; and Boston Consulting Group as its industry consultant.
