--- title: "80 billion China Resources Beer! The key figure 'steps down'" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/31791416.md" description: "Recently, a personnel change at China Resources Beer has sent shockwaves through the capital market. According to an announcement disclosed by China Resources Beer, Hou Xiaohai, the CEO who had been at the helm for nine years, resigned from all his positions with immediate effect. For China Resources Beer, Hou Xiaohai was not only the CEO but also the driving force behind the company's business recovery. Records show that Hou Xiaohai joined China Resources Beer through social recruitment in 2001. In 2005, as the marketing director, he successfully led the "Brave the Journey" marketing strategy, turning Snow into the best-selling single beer in China, with annual sales exceeding 1.58 million kiloliters..." datetime: "2025-07-15T02:30:51.000Z" locales: - [en](https://longbridge.com/en/topics/31791416.md) - [zh-CN](https://longbridge.com/zh-CN/topics/31791416.md) - [zh-HK](https://longbridge.com/zh-HK/topics/31791416.md) author: "[侃见财经](https://longbridge.com/en/profiles/3206955.md)" --- # 80 billion China Resources Beer! The key figure 'steps down' Recently, a personnel change at China Resources Beer (CR Beer) has caused a huge stir in the capital market. According to the announcement disclosed by CR Beer, Hou Xiaohai, the CEO who had been in charge of the company for nine years, resigned from all positions with immediate effect. For CR Beer, Hou Xiaohai was not only the CEO but also the key figure behind the company's business recovery. Records show that Hou Xiaohai joined CR Beer in 2001 through social recruitment. In 2005, as the marketing director, he successfully led the "Brave the Journey" marketing strategy, turning Snow Beer into the best-selling single beer brand in China, with annual sales exceeding 1.58 million kiloliters.   In March 2016, Hou Xiaohai was appointed as the general manager of CR Beer through an open recruitment process and was promoted to CEO the following month. At the beginning of his tenure, although CR Beer's sales volume was already the highest in China, its profits ranked last among the top five beer giants. Facing the situation of being "big but not strong," Hou Xiaohai launched the "3+3+3" nine-year strategy, aiming to secure the top position in the high-end beer market by 2025. This strategy achieved significant results: during his nine-year tenure, CR Beer's gross margin rose from 33.71% to 42.6%, and net profit attributable to shareholders surged from 629 million yuan to 4.739 billion yuan, an increase of nearly eightfold. However, behind these highlights, Hou Xiaohai also faced setbacks, particularly in cross-border ventures into the liquor industry. Records show that CR Beer began entering the liquor market in 2020, acquiring stakes in Shanxi Fenjiu, Jingzhi Liquor, Jinseed Group, and Jinsha Liquor, with total investments exceeding 20 billion yuan. However, except for Shanxi Fenjiu, the other three acquisitions ended in failure. Currently, after several years of high performance, CR Beer is facing challenges again. Financial reports show that CR Beer achieved revenue of 38.64 billion yuan, a year-on-year decline of 0.76%, and net profit of 4.739 billion yuan, a year-on-year decline of 8.03%. Over a longer period, this is the worst annual report CR Beer has delivered in nearly a decade. The performance clearly indicates that CR Beer is under significant operational pressure. With the departure of its key figure, Hou Xiaohai, the road ahead for CR Beer in the "post-Hou Xiaohai era" is fraught with challenges. **Highlights** The history of CR Beer dates back to 1993. Its predecessor was Shenyang CR Snow Brewery Co., Ltd., a joint venture between Hong Kong's CR Enterprises and Shenyang Brewery. Since it had no prior experience in the beer industry, CR Enterprises also brought in South Africa's SAB Brewery Group to ensure smooth operations. In its first decade, CR Beer underwent rapid expansion driven by capital, acquiring over ten companies, including Dalang Bohai Brewery and Sichuan Blue Sword Brewery, quickly expanding its footprint from northeastern China to nationwide. By 2003, CR Beer had become China's second-largest beer company, operating 29 breweries with a production capacity of 4.2 million kiloliters. However, despite its growing scale, CR Beer found itself in a "big but not strong" situation. In response, then-general manager Ning Gaoning proposed the famous "26 Cats and One Tiger" theory, addressing the issue of resource dispersion. At this time, Hou Xiaohai, then the sales development director, began to shine. He systematically overhauled the company's sales and channel management systems and established a scientific performance evaluation system for CR Beer. In 2005, Hou Xiaohai's defining moment arrived. The "Brave the Journey" marketing campaign he led pioneered a "brand image + brand activity + product line" model, propelling Snow Beer to become the national sales champion. But that wasn't all. In 2008, when Budweiser, Yanjing, and Tsingtao heavily invested in Olympic sponsorships, Hou Xiaohai innovatively launched a "non-Olympic marketing" strategy. Snow Beer aired ads on CCTV as the "official partner of beer enthusiasts," achieving higher brand recognition with less than one-tenth of competitors' budgets. This earned him the title of "China's pioneer of non-Olympic marketing." In March 2016, Hou Xiaohai became CR Beer's general manager through open recruitment and was promoted to CEO the next month. At the start of his tenure, although CR Beer's sales were already the highest in China, its profits lagged behind the other top five beer giants, putting the company back in a "big but not strong" position. To address this, he introduced the "3+3+3" strategy: the first three years (2017-2019) involved drastic measures like closing 13 inefficient factories and laying off 25,000 employees; the second three years (2020-2022) focused on "quality development" and brand restructuring; and the third three years (2023-2025) aimed to "win in the high-end market." Although this strategy brought short-term pain, CR Beer soon underwent a rebirth, with a younger workforce and significant improvements in per capita income and productivity. In 2019, Hou Xiaohai led CR Beer's strategic partnership with Heineken, valued at 24.35 billion HKD. After the deal, CR Beer formed a "4+4" high-end brand matrix—Brave the Journey SuperX, Snow Mars Green, Craftsmanship, and Mask Series as domestic brands, paired with Heineken, Sol, Amstel, and Edelweiss as international brands. Performance-wise, under Hou Xiaohai's leadership, CR Beer resolved its "big but not strong" issue. In 2024, CR Beer achieved a net profit attributable to shareholders of 4.739 billion yuan and a gross margin of 42.64%, compared to 629 million yuan and 33.71% in 2016. **Failure in Liquor?** If judged solely by his beer business achievements, Hou Xiaohai's track record is nearly flawless. Unfortunately, after great success in beer, Hou Xiaohai chose to expand into the liquor market, which may have been the trigger for his departure. Records show that CR Beer first entered the liquor industry in 2018, acquiring an 11.45% stake in Shanxi Fenjiu under the banner of "Shanxi's first state-owned enterprise mixed-ownership reform." After the "CR Group" joined, Shanxi Fenjiu incorporated directors and executives with CR backgrounds, including Hou Xiaohai. With CR's support, Shanxi Fenjiu's performance underwent a qualitative leap: from 2018 to 2024, its revenue grew from 9.444 billion yuan to 36.01 billion yuan (up 281.3%), and net profit rose from 1.507 billion yuan to 12.24 billion yuan (up 712.21%). Shanxi Fenjiu's success boosted Hou Xiaohai's confidence, leading to three major subsequent deals: in 2021, partnering with CDH to acquire a 60% stake in Jingzhi Liquor; in 2022, acquiring a 49% stake in Jinseed Group; and in October of the same year, spending 12.3 billion yuan to acquire a 55.19% stake in Jinsha Liquor, setting a record for liquor industry M&A. These three disclosed transactions alone exceeded 20 billion yuan. Hou Xiaohai envisioned creating a "Chinese version of Diageo" by integrating liquor brands of various flavors and tiers through capital mergers. However, expectations and reality diverge sharply. Take Jinsha Liquor as an example: CR Beer not only acquired it at peak valuation, but Jinsha Liquor was already a third-tier brand. While it performed decently during the industry's upswing, its bubble burst quickly when the industry entered a downturn. In 2024, Jinsha Liquor's revenue was 2.15 billion yuan, down 41% from 3.64 billion yuan in 2021 before the deal. In terms of profit, Jinsha Liquor's EBITDA in 2023 was 847 million yuan. After deducting 25% tax, net profit would be 680 million yuan, nearly halving from 1.315 billion yuan in 2021. In reality, Hou Xiaohai's failure in the liquor industry was almost inevitable. Beer is a fast-moving consumer good where distribution is the core competitive advantage, with brand playing a lesser role. Liquor, however, is entirely different—brand is paramount, and distribution comes second. Even strong distributors like Luzhou Laojiao and Gujinggong rely on solid brands. Among the three liquor companies CR Beer acquired, Jingzhi Liquor was obscure, Jinsha Liquor was third-tier, and the slightly more recognizable Jinseed Liquor was a declining, low-end brand. Overall, applying beer business strategies to liquor was doomed to fail, especially given that all acquisitions were made at peak valuations. Of course, with Hou Xiaohai's resignation as CEO, both his successes and failures are now set in stone. However, CR Beer is currently facing difficulties again. Financial reports show that in 2024, CR Beer's revenue was 38.64 billion yuan, down 0.76% year-on-year, and net profit was 4.739 billion yuan, down 8.03% year-on-year. Over a longer period, this is the worst annual report CR Beer has delivered in nearly a decade. $CHINA RES BEER(00291.HK) ### Related Stocks - [02939.HK](https://longbridge.com/en/quote/02939.HK.md) - [80291.HK](https://longbridge.com/en/quote/80291.HK.md) - [00291.HK](https://longbridge.com/en/quote/00291.HK.md)