Coca-Cola is no longer selling well! The parent company, China Resources Beverage, saw its net profit shrink by 40% last year. Has the "bottled water battle" been decided?

The China Business Journal reporter｜Fan Wang　The China Business Journal editor｜Yi Ming Zhang

Login for the second year of Hong Kong stocks, and the parent company of Yibao, China Resources Beverage (HK02460, share price HKD 9.01, market cap HKD 21.61B), has failed to achieve growth in performance.

On the evening of March 26, China Resources Beverage released its 2025 results: for the full year, operating revenue was RMB 11B, down 18.6% year over year; net profit attributable to shareholders was RMB 985 million, down 39.8% year over year. This is the first time the company has seen negative performance growth since 2021.

A reporter with The China Business Journal found that starting in 2024, leading packaged water companies launched a “water war,” and the industry has entered a multi-dimensional game of competition across pricing, channels, branding, and water sources. With the recent release of performance disclosures, China Resources Beverage is clearly behind. Nongfu Spring achieved double-digit growth in both revenue and profit in 2025, while regional player Quan Yangquan’s performance also came with an upward earnings forecast.

At a crucial moment where the outcome matters, China Resources Beverage chose to replace the chairman of the board and the chief financial officer, and has continuously rolled out dividend and executive shareholding increase plans. So, can this series of moves help China Resources Beverage shake off its burdens, regain market confidence, and set off again?

Packaged water sales decline; beverage growth falls short of expectations

As one of China’s earliest packaged drinking water companies, China Resources Beverage has brands including Yibao and Zhiben Qingrun under its umbrella. Although it is an industry veteran with more than 40 years of history, the company only listed on the Hong Kong Stock Exchange in 2024, making it a newcomer in the capital markets. Before listing, from 2021 to 2023, China Resources Beverage maintained performance growth, with its revenue scale expanding from RMB 11.3 billion to RMB 13.5 billion.

However, in the year it listed, China Resources Beverage’s revenue still stayed at around RMB 13.5 billion, and in its second year, performance directly turned downward. According to the results released on the evening of March 26, in 2025 China Resources Beverage achieved operating revenue of RMB 11B, down 18.6% year over year; net profit attributable to shareholders was RMB 985 million, down 39.8%.

A reporter with The China Business Journal noted that, from the perspective of revenue structure, the decline in packaged drinking water revenue is the main reason for the company’s weak performance. China Resources Beverage disclosed that among its two major product lines, packaged drinking water with Yibao at the core accounted for 86.4% of revenue, while beverages accounted for 13.6%. Of this, packaged drinking water revenue decreased 21.6% year over year, while beverage product revenue increased 7.3% year over year.

China Resources Beverage admitted that in 2025, its packaged water business continued to face pressure, with lower volume, while the beverage business growth rate fell short of expectations. On the other hand, the company increased its投入 into marketing resources and saw changes in its product mix; these combined factors led to the performance decline. The gross margin fell by 1.6 percentage points year over year, and the net profit margin dropped by 3.1 percentage points.

Facing the sluggish performance, China Resources Beverage also launched internal changes. Earlier this year, the company officially announced that Gao Li, who has a background in financial audit, has served as an executive director, chairman of the board, and chair of the nominating committee since January 14; Huang Ge has served as chief financial officer since February 13.

Recently, alongside the release of performance results, China Resources Beverage also announced that it would pay dividends at no less than 90% of the net profit attributable to shareholders in 2025. In addition, on March 26, the company disclosed a shareholding increase plan. The chairman of the board and executive director Gao Li, the president and executive director Li Shuqing, the chief financial officer Huang Ge, and several other directors and senior management members of the company plan to use a total of up to HKD 3.4 million to increase their holdings of the company’s shares (of which Gao Li plans to use up to HKD 1 million).

The packaged water industry shifts from a price war to a value war

Yibao’s declining market performance is inseparable from the intense competition in the packaged water industry in recent years. Starting in 2024, the industry launched a “water war.” Nongfu Spring rolled out “Little Green Bottle” purified water, entering Yibao’s and Wahaha’s strongholds; Wahaha leveraged brand nostalgia to “revive” and strengthen its market push; brands such as Pangdonglai, Luckin Selection, 康师傅, and Jinmailang also entered the fray from other categories. In the drinking water segment, bottle water unit prices were at one point “pushed down” to below RMB 1.

In terms of performance, China Resources Beverage is clearly lagging behind. A research report from CITIC Securities shows that as of September 2025, Nongfu Spring ranked first in the industry with a 33% market share; Wahaha’s market share rose by 2 percentage points year over year, ranking second; and Yibao’s market share fell by 3 percentage points.

A reporter found that one of China Resources Beverage’s longtime rivals, Nongfu Spring, recently released performance results indicating that in 2025 its revenue was RMB 52.55B, up 22.5% year over year; and net profit attributable to shareholders was RMB 15.87B, up 30.9% year over year. Of this, packaged drinking water accounted for 35.6% of Nongfu Spring’s revenue, while beverage products such as tea, fruit juice, and functional beverages accounted for 64.4%. Nongfu Spring has well-known beverage brands beyond its bottled water, such as 东方树叶 (Oriental Leaf), 茶π (Tea Pi), 尖叫 (Scream), and 农夫果园 (Nongfu Orchard), and its product diversification is far ahead of China Resources Beverage.

On the other hand, the growth of regional water companies should not be underestimated either. They achieved rapid growth in key brand regions by relying on solid relationships with distributors, local geographic and cultural factors, and shorter transportation radii. A performance pre-announcement from Quan Yangquan, from Northeast China, shows that it is expected that in 2025 its net profit attributable to shareholders will increase by more than 1 times, while mineral water sales volume will rise by 33.84%.

A research report from Kaiyuan Securities points out that it is expected that in the future, competition in the packaged drinking water industry will gradually shift from the past price war toward a value war. Leading companies are expected to continuously improve their market share by leveraging advantages in resources, channels, brands, and production capacity. Among these, product innovation and scenario segmentation have become important growth drivers.

On the product side, two main lines are emerging: first, quality upgrades, with leading companies accelerating their layout in mineral water and natural mineral water segments; second, form and packaging innovation—small-capacity portable packs tailored for immediate scenarios such as outdoors and office use, while large home-pack formats rely on high cost-effectiveness to become the mainstream for household consumption. On the scenario side, development continues to be further segmented, and precisely targeted products such as infant and maternal water, sports water, and tea-based beverage pairing water have risen rapidly.

For its future development plans, China Resources Beverage stated in its financial reports that in 2026 the group will focus on brand youthfulness and deep consumer insights, and will build a strategy toward category diversification, scenario segmentation, and high-end value. For example, it will focus on building a tiered product matrix and iterating growth categories such as tea-based beverages and sports drinks; it will continue to deepen sports marketing, refine the terminal market, and integrate with a full-channel network to strengthen market penetration power with a systematic strategy, etc.

Regarding the specific measures the company will take to improve future performance, a reporter with The China Business Journal sent an interview email to China Resources Beverage; as of the time of this release, no response has been received.

Cover image source: Tan Yuhan