Xi'an Hans Brewery Enterprise Analysis Report

Address: No. 116 Dongyuan Road, Xi'an

Business Project: Liquor Production

Financial strength: annual income of 50 million to 100 million

Macro-environmental factors: In the early 1980s, the per capita beer consumption of Chinese people was only 0.5 liters a year, and the total annual consumption was less than 100 million tons. Today, China has grown into the world’s largest beer market. Despite this, China’s per capita beer consumption is still far behind that of other major beer countries. The average annual consumption of beer per person in China is 21.5 liters, while the figures in Japan and the United States are 50 liters and 84 liters respectively.

(1) The economy continues to grow at a high rate:

The beer industry developed most rapidly from the late 1980s to the mid-to-late 1990s, with the average annual growth rate of consumption in More than 15%, this period is precisely the stage of rapid development of China's economy. According to official forecasts, China's "economic miracle" is still hot, and the annual domestic GDP growth rate in the next 10 years will not be less than 7%. For developing countries, there is a positive correlation between net beer consumption and per capita GDP. With the new round of economic development boom, China's beer market capacity has great room for growth.

(2) The mid-to-high-end market is trending well:

Almost all large breweries regard entering the high-end beer market as an important growth point for profits. Take Hans Beer as an example. In 2004, high-end beer accounted for 20% of the total output and achieved 50% profit. This shows the charm of high-end beer. Qingdao, Lanma, Zhujiang, Baoji and other companies have also successively launched their own high-end beer products, and will enter the mid-to-high-end markets such as catering and entertainment through various forms. Foreign giants have also exerted their efforts and laid out their own chess pieces.

In the current social class structure of China, the middle class of society with an annual income of more than 40,000 yuan accounts for 20%, and is increasing at an annual rate of 1%. As far as beer is concerned, products with ordinary taste and moderate prices can no longer satisfy the consumption preferences of middle- and high-income people. Consumers are becoming more and more picky about beer drinking experience, and the entire price range is bound to rise accordingly. This phenomenon is not uncommon in foreign markets. Market information also clearly shows signs of price upgrades: as of the end of 2004, the market share of high-end and sub-high-end segments accounted for more than 15%, and the growth rate was significantly higher than that of ordinary beer.

(3) The low-end market has unlimited potential:

China is a large agricultural country. Among the 1.3 billion people, the rural population accounts for 72%, and the annual per capita beer consumption of the rural population is still Less than 8 liters. The biggest beneficiaries of the comprehensive construction of a moderately prosperous society will be the rural population. With the advancement of industrialization, the living standards of rural residents will significantly improve. According to analysis, after the gap between urban residents and rural residents in the possession of daily consumer goods is eliminated, the overall consumption of China's beer market will increase by 20 million tons. In fact, in recent years, the growth of beer consumption has been gradually deepening and transitioning to rural areas, and the consumer population is growing at an annual rate of 20%.

At the same time, rural beer consumption is generally still at a lower level of functional consumption stage, that is, consumption behavior generally only occurs during festive banquets or entertaining guests. From a behavioral perspective, although the market still needs further development, the development potential cannot be ignored.

Industry competition characteristics:

(1) Industry concentration is not high:

Among the world's major beer producing countries, China is the largest beer industry except Germany. The country with the lowest concentration. The process of marketization and internationalization of China's economy is still further accelerating, and the beer industry is experiencing a baptism of waves. It is an inevitable trend for China's beer industry to further increase its concentration in the future. But from the current point of view, China's beer industry is still in the stage of multi-level brand existence.

(2) Obvious regional effect:

The shelf life of beer is relatively short, which determines that the beer industry is a highly regional enterprise. For most breweries, operating income depends largely on local market share. For example, Yanjing Beer currently has a market share of around 10.5% in China, but its market share in North China reaches 45%, and its market share in Beijing is as high as 92%.

(3) Scale determines benefits:

The beer industry is a traditional industry with relatively low technical entry barriers, but it has obvious scale effects. The experience of mature foreign markets shows that in this industry, only leaders can survive. For this reason, not only domestic and foreign giants are vying for territory, but many second-tier beer "princes" who were originally dominant in one area have also begun to plunder the expansionary market in China.

Intensity of competition: each side is on one side, less direct conflict

Competitors: Yanjing Beer, Tsingtao Beer,

Competitor strength:

(1) Tsingtao Beer

In 2004, the company achieved beer sales of 3.71 million tons, a year-on-year increase of 13.8%; sales revenue of 8.62 billion yuan; net profit of 280 million yuan; beer The production and sales volume in China’s market share reached 12.75%. As the largest beer manufacturer and seller in China, the company has achieved such results thanks to internal system integration, optimization of management processes and enhancement of synergy effects. In terms of production scale, Tsingtao Brewery also further improved its domestic market production layout in 2004. In June 2004, the company invested 65 million yuan to acquire a 55% stake in Gansu Nongken Beer, laying the foundation for further expanding the company's market advantage in the western region; in August, the first phase of Tsingtao Changsha's 100,000-ton beer project was put into production, with a total of 50,000 tons. Help the company cultivate the main brand of Tsingtao Beer in South China and expand its market share.

(2) Yanjing Beer

Yanjing currently has 16 companies in China, with a market share of 10.5% in China. It has a dominant position in the North China market, with a market share of up to 50%. In 2004, Yanjing *** produced and sold 2.64 million tons of beer, a year-on-year increase of 32%; it achieved sales revenue of 4.67 billion yuan and a net profit of 270 million yuan. The profit level continues to maintain the leading level in the same industry. The brand value of the "Yanjing" brand reached 10.179 billion yuan. Yanjing has gradually completed its transformation from a Beijing brand to a famous Chinese brand. In 2005, the company also invested 680 million yuan in the deployment of five large-scale projects, which have fully blossomed in Xiantao, Hubei, Fuzhou, Jiangxi, Yulin, Guangxi, Baotou, Inner Mongolia, and Foshan, Guangdong, further improving the overall layout of China.