Introduction:Bestore’s parent company, China Resources Beverage (Holdings) Company Limited, has recently passed the Hong Kong Stock Exchange’s listing hearing. The IPO is jointly underwritten by Bank of America Securities, BOC International, CITIC Securities, and UBS. The offering plans to raise between US$500 million and US$1 billion, with listing expected as early as October. The funds raised will primarily be used for constructing and expanding production bases. This article details the background, financial performance, and future plans of China Resources Beverage ahead of its market debut, helping readers stay informed on the movements of this soon-to-be-listed water industry giant.
China Resources Beverage (Holdings) Company Limited, the parent company of the well-known packaged water brand Bestore, has successfully passed the listing hearing of the Hong Kong Stock Exchange. This IPO round is jointly underwritten by internationally renowned investment banks including Bank of America Securities, BOC International, CITIC Securities, and UBS Group, reflecting significant market attention toward the company.
It is understood that this offering by China Resources Beverage plans to raise between US$500 million and US$1 billion, equivalent to approximately RMB 3.5 billion to RMB 7 billion. Listing is expected to be completed as early as October this year. The raised funds will mainly be invested in the construction of new factories in Zhejiang, Hubei, Chongqing, and Shanghai, while also expanding existing production bases to further enhance overall production capacity and supply chain efficiency.
As of the end of April 2024, China Resources Beverage owns 13 self-operated factories and collaborates with 34 production partners nationwide. Its main products include packaged drinking water and a variety of beverages. In recent years, the company has continued to invest in production capacity expansion. From 2021 to 2023, its standard production capacity reached 5.443 million tonnes, 5.687 million tonnes, and 6.749 million tonnes respectively, with currently operational self-owned factories achieving an annual production capacity of 12.4 million metric tonnes.
China Resources Beverage’s core brand ‘Bestore’ has long held a significant position in China’s purified water market. According to the hearing documents, in 2023 the company’s total revenue reached RMB 13.515 billion, of which revenue from the Bestore brand alone amounted to RMB 12.405 billion, accounting for over 90% of the total.
As an important member of China Resources Group, China Resources Beverage is currently 60% owned by China Resources Group—a state-owned enterprise group headquartered in Hong Kong, ranked 74th on the 2023 Fortune Global 500 list. Its business spans large consumer sectors, energy, urban construction, health care, financial technology, and emerging industries. If the listing is successful, China Resources Beverage will become the 18th listed company under China Resources Group.
The hearing documents also disclosed China Resources Beverage’s operating performance for the first four months of 2024. As of April 30, the company achieved operating revenue of RMB 4.15 billion, with a profit of RMB 461 million during the period. Packaged drinking water products contributed nearly 90% of the revenue, reaching RMB 3.721 billion, while beverage products accounted for about 10%, generating RMB 429 million. Notably, the gross margin rose to 47.1% during the period, and the net profit margin also increased to 11.1%.
Looking back over the past three years, China Resources Beverage has shown a steady growth trend in both revenue and profitability: from 2021 to 2023, its revenues were RMB 11.340 billion, RMB 12.623 billion, and RMB 13.515 billion respectively. Profits during the period increased from RMB 858 million to RMB 1.331 billion, with net profit margins rising from 7.6% to 9.9%. Gross margins were 43.8%, 41.7%, and 44.7% over those years, demonstrating a year-on-year improvement in profitability.
According to market data, in 2023, the retail sales of Bestore purified water reached RMB 39.5 billion. In terms of retail sales, China Resources Beverage holds a 32.7% market share in the purified water market, firmly ranking first in the industry. In the broader packaged drinking water market, it holds an 18.4% market share, second only to leading brand Nongfu Spring, making it the second-largest player nationwide.
The funds raised in this IPO will be allocated towards several strategic directions, including: strategically expanding production capacity and improving supply chain efficiency; accelerating the layout and optimization of sales channels; strengthening marketing and brand activities to enhance brand value; increasing investment in product research and development to expand into new categories; driving digital transformation to improve efficiency in sales, production, logistics, and other areas; as well as seizing potential mergers, acquisitions, and investment opportunities, along with general working capital purposes.
The above content is compiled by CoffeeHunters, a coffee news website.
