China Resources Beer Holdings Company Limited (0291.HK) reported Q3 2024 results with revenue of HKD 8.25 billion, up 9.5% year over year but down 67.95% quarter over quarter. The quarter featured a negative operating margin driven by elevated selling, general, and administrative expenses and lower operating leverage, culminating in an operating loss of HKD 325.7 million despite EBITDA of HKD 291.9 million. Net income was modest at HKD 18.8 million, translating to a net margin of 0.23% and an EPS of HKD 0.0058. The company continues to generate meaningful cash from operating activities (HKD 507.3 million) but recorded negative free cash flow of HKD 241.5 million due to sizable capital expenditure (HKD 748.8 million) and a heavy dividend outflow (HKD 1,862.6 million).
On the balance sheet, CRB remains cash rich with HKD 4.23 billion of cash and cash equivalents and a net cash position (net debt negative) of HKD 1.68 billion. Total assets stood at HKD 76.8 billion, with goodwill and intangible assets totaling HKD 27.76 billion, signaling a form of asset-rich balance sheet typical for a large bottler/beer platform with extensive production capacity and distribution capabilities. Management highlighted ongoing investments to support premiumization, brand portfolio execution (including Heineken and related beer brands), and cost-control initiatives in a challenging macro environment. The earnings trajectory suggests a narrowing of margins due to higher cost structures and seasonal headwinds, even as revenue growth demonstrates the underlying scale and brand strength in the Mainland China beer market. Investors should weigh the near-term profitability pressures against the longer-term cash generation potential and the strategic positioning as a large, cash-generative franchise with a net cash balance sheet.