Chongqing Beer Releases Annual Report: Frequent New Product Launches, Revenue Flat, Net Profit Soars "Thanks to" Lawsuits?

Chongqing Beer has released the earliest annual report in the A-share beer industry.

On the evening of March 10, Carlsberg China’s listed entity Chongqing Beer published its 2025 annual report, showing increases in revenue, net profit, and sales volume. Data indicates that last year, Heavy Beer achieved a sales volume of 2.9952 million hectoliters, up 0.68% year-over-year; operating revenue was 14.722 billion yuan, up 0.53%; and net profit attributable to shareholders was 1.231 billion yuan, up 10.43%.

Chongqing Beer 2025 Annual Financial Data (Screenshot source: company financial report)

Nandu Bay Finance and Social - Alcoholic Beverage New Consumption Index team noted that Chongqing Beer’s net profit attributable to shareholders increased by 10.43% year-over-year in 2025, marking the largest growth in nearly six years. However, analysis of the financial report reveals that part of this growth was due to the financial impact of a dispute in 2024 involving Chongqing Jiawei’s underwriting. Excluding this non-recurring gain or loss, Chongqing Beer’s net profit after deducting non-recurring items decreased by 2.78%, reflecting pressure on core business growth.

It is noteworthy that last year, the overall beer industry was in a stock-based competition phase. Chongqing Beer launched over 30 new products throughout the year to expand and “test the waters.” Although these new products had limited impact on current revenue, Chongqing Beer simultaneously promoted channel reforms to cope with industry stock competition.

Based on actual performance in 2025 and market capital flow, on March 11, Chongqing Beer opened lower, closing at 5.622 billion yuan, down 1.44%.

Significant Increase in Net Profit Attributable to Shareholders, Driven by a Provision from the Year Before

Data shows that, except for the first quarter of last year, Chongqing Beer’s net profit attributable to shareholders in the first half and the first three quarters declined year-over-year. However, after the fourth quarter, the company achieved over 10% annual growth in net profit attributable to shareholders.

Nandu Bay Finance and Social observed that the large increase in net profit attributable to shareholders in 2025 was related to a significant narrowing of losses in the fourth quarter. Data indicates that Chongqing Beer’s net loss attributable to shareholders in Q4 2025 was 0.1 billion yuan, compared to a loss of 2.17 billion yuan in Q4 2024.

However, the same source found that this substantial narrowing was not strongly related to operational performance but was more associated with a legal dispute involving Chongqing Jiawei Beer Co., Ltd. (hereafter “Chongqing Jiawei”) and Chongqing Beer over a mountain city beer underwriting contract.

On the evening of March 14, 2025, Chongqing Beer announced that the Fifth Intermediate People’s Court of Chongqing ruled against it in the first instance and ordered Chongqing Jiawei to pay large damages. Based on prudent accounting principles, Chongqing Beer’s subsidiary, Carlsberg Chongqing Beer Co., Ltd., provisioned approximately 254 million yuan as estimated liabilities, which was expected to reduce the company’s 2024 profit by 254 million yuan and net profit attributable to shareholders by 130 million yuan.

Nandu Bay Finance and Social noted that this provision was recorded as non-recurring gains and losses in the 2024 financial report. In other words, the over 10% year-over-year increase in Chongqing Beer’s net profit attributable to shareholders in 2025 can also be viewed as a “help” from this legal case. If measured by non-recurring net profit, Chongqing Beer’s 2025 non-recurring net profit was 1.187 billion yuan, down 2.78% year-over-year.

Regarding the large increase in net profit attributable to shareholders but a decline in non-recurring net profit, Chongqing Beer President Li Zhigang stated at the earnings briefing on the afternoon of March 10 that multiple factors affected non-recurring net profit, “but the company’s overall profitability remains good.”

Additionally, it was learned that in December last year, Chongqing Beer reached a settlement with Chongqing Jiawei over the underwriting dispute, which increased Chongqing Beer’s total profit for 2025 by approximately 37.11 million yuan and net profit attributable to shareholders by about 19.08 million yuan.

Market Stock Competition and Over 30 New Products Launched Last Year

Data shows that last year, the production of beer by large-scale enterprises in China decreased by 1.1% year-over-year. The industry was in a deep stock-based competition phase, with beers priced around 8 yuan gaining market recognition and continuing to grow significantly. In contrast, high-end and ultra-premium beers priced above 10 yuan experienced slight growth or remained flat.

For Chongqing Beer, which has a product layout focused on high-end and above, this market trend is reflected. According to Nandu Bay Finance and Social, Chongqing Beer’s revenue remained flat compared to the previous year, closely related to its sales performance across different price segments. The company’s 2025 report shows that revenue from premium beers (8 yuan and above) was 8.779 billion yuan, up 2.19% year-over-year.

However, the performance of mainstream and economy-priced beers in Chongqing was similar to that of high-end beers. Data indicates that last year’s revenue from mainstream products (4-8 yuan) was 5.189 billion yuan, and from economy products (below 4 yuan) was 328 million yuan, down 1.03% and 1.8%, respectively.

In response to market changes, Li Zhigang mentioned that the industry environment in 2025 was relatively weak, but the trend toward high-endization of beer continued. “We are still investing heavily in high-end products. The trend in premium categories is not about more consumption but about consumers seeking better experiences, and they are willing to pay a premium for new products.”

Last year, Chongqing Beer launched over 30 new products, including several large-packaged beers with a retail price of about 18-20 yuan for 1L (roughly 10 yuan for 500ml). These included regular lagers and Chinese craft beers, with both frequency and variety rarely seen in the industry. Li Zhigang believes that 1-liter products are not just about cost performance. “These new products are fun and innovative, and their craft nature can meet emotional needs. The ceiling for high-endization is far from reached.”

However, in practice, Chongqing Beer’s large-pack products did not significantly impact last year’s performance. The overall market benefits still mainly concentrated in the 8-yuan price segment, where Yanjing Beer and Zhujiang Beer, focusing on this segment, performed relatively well.

Increasing Share of On-Premise Channels and Expanding Instant Retail

According to Nandu Bay Finance and Social, to break through in the current market, beer companies need to not only consolidate traditional channels like catering but also expand into new channels, with instant retail becoming a key focus last year.

Chongqing Beer’s 2025 report shows that last year, the proportion of non-on-premise channels further increased. Emerging channels such as O2O, e-commerce, and convenience stores performed well; traditional channels expanded through distribution and digital promotion; modern channels like warehouse membership stores and snack discount stores made positive progress.

Specifically, Chongqing Beer increased cooperation with platforms like group-buy flash sales and certain online supermarkets. At the end of last year, Carlsberg China announced a three-year strategic partnership with a major online supermarket, integrating offline platforms, online stores, quick delivery, and front-end warehouse services.

Regarding instant retail, Li Zhigang believes that, given many market gaps, instant retail is a good platform. “Many consumers can no longer tolerate waiting until the next day for delivery after placing an order, and this behavioral shift is irreversible. Therefore, increasing investment in instant retail is the industry’s move toward better meeting consumer needs.”

After Chongqing Beer disclosed its specific performance, questions remain about how other domestic or China-focused listed beer companies are performing. Nandu Bay Finance and Social - Alcoholic Beverage New Consumption Index team will continue to monitor.

Nandu Bay Finance and Social Reporter: Beibei