Tsingtao Beer Slows Down: Revenue Declines in the Second Half, Quarterly Losses Increase, Product Structure Upgrades Fail to Hide Decline in Ton Price

Produced by: Sina Finance Listed Company Research Institute

Author: Hao Xian

On March 26, Qingdao Beer released its 2025 annual report, achieving operating revenue of 32.47B yuan, a year-on-year increase of 1.04%. Among the four leading beer companies that have disclosed their performance, Qingdao Beer ranked first in growth rate, and after two consecutive years of decline in beer sales, it saw a rebound.

However, behind this performance lies the fact of sluggish growth. From the perspective of revenue growth rate, the 1.04% increase in 2025 marked the lowest growth in nearly five years (excluding the revenue decline in 2024). Last year, net profit attributable to the parent was 4.49M yuan, up 5.6% year-on-year, ending the double-digit growth seen before 2023, and below previous brokerage expectations. Although sales increased, they still did not return to the 2023 level.

Meanwhile, while Qingdao Beer’s high-end product growth outpaced the overall, promotional activities and channel changes offset the impact of product structure upgrades, leading to a decline in tonnage price.

The beer industry has now entered a stock competition phase, with five major brands—China Resources Beer, Qingdao Beer, Budweiser APAC, Yanjing Beer, and Chongqing Beer—dominating 90% of the market share. In this context, both nationwide expansion and premiumization will face fierce competition.

Second half of the year saw negative revenue growth; product structure upgrades could not prevent ton price decline

Quarterly, Qingdao Beer maintained slight growth in the first half, performance began to decline in the third quarter, and accelerated in the fourth quarter, with losses reaching 686 million yuan.

Generally, the fourth quarter is the off-season for Qingdao Beer sales, with demand in catering, nightlife, and on-premise channels shrinking significantly. Historically, this period often results in losses, but last year’s fourth quarter loss of 687 million yuan was a recent high. Additionally, gross profit margin in Q4 fell to 24.72%, down 1.5 to 3 percentage points compared to the previous two years.

According to brokerage research reports, in Q4, sales volume of Qingdao’s main brand decreased by 0.2% year-on-year, while other brands grew by 0.8%, indicating a slowdown in product structure upgrading. Correspondingly, gross profit margin and net profit margin declined by 1.5 and 1.8 percentage points respectively year-on-year.

In terms of sales volume, last year Qingdao Beer’s beer sales reached 7.65 million kiloliters, up 1.46% year-on-year, marking a rebound after two consecutive years of decline.

However, the ton price showed an opposite trend, with the overall ton price in 2025 at 4,161 yuan, down 0.67% year-on-year, also below 2023 levels. The ton price of Qingdao Beer’s main brand dropped from 5,088 yuan to 4,984 yuan, a decrease of about 2%.

Institutional research reports indicate that the decline in ton price is mainly due to the slow recovery of consumer spending in catering channels, weakening the boost from product upgrades. To promote sales, the company increased the proportion of new retail channel sales and offered larger discounts, which also put pressure on ton price. This suggests that Qingdao Beer adopted a price-for-volume strategy to stimulate sales.

From cash flow, in 2025, the company received 36.87 billion yuan from sales of goods and services, a decrease of about 3% year-on-year, with the cash collection ratio dropping 4.88 percentage points to 113.54%, reflecting a weakening cash conversion ability.

Notably, despite revenue growth last year, Qingdao Beer’s contract liabilities decreased by 7.69%. Contract liabilities mainly represent prepayments from distributors, serving as a forward-looking indicator of business health. The decrease indicates reduced distributor payment enthusiasm.

Meanwhile, as of the end of 2025, accounts receivable increased by about 25% to 127 million yuan, far exceeding revenue growth. The increase and decrease in these metrics further confirm that the company relaxed credit policies to stabilize distributors and boost terminal sales.

How can Qingdao Beer break through?

In 2025, the total beer production of large-scale enterprises in China was 35.36 million kiloliters, down 1.1% year-on-year. The Chinese beer industry has bid farewell to the high-speed growth driven by scale expansion, shifting its core growth logic from “volume increase” to “price increase,” with premiumization, diversification, and national reach becoming the main competitive strategies for leading companies.

At the same time, industry concentration continues to rise, with China Resources Beer, Qingdao Beer, Budweiser APAC, Yanjing Beer, and Chongqing Beer holding 90% of the market share. So far, excluding Yanjing Beer, the other four companies have disclosed their 2025 performance, with a median revenue growth rate of -0.63%. Under these circumstances, both nationwide expansion and premiumization face fierce competition.

Qingdao Beer currently faces stagnation in its core market and difficulties expanding outside the region. As of 2025, 69% of revenue still came from Shandong Province, nearly seven-tenths. Last year, revenue in Shandong grew by 1.04%, while the largest outside market, North China, grew only 0.78%, and South China increased by 1.18%. In southern markets, Qingdao Beer faces strong competition from rivals, making it difficult to effectively increase market share.

Regarding premiumization, in 2025, Qingdao Beer’s main brand (mainly targeting mid-to-high-end beer consumers, with Laoshan Beer and others targeting mass markets) achieved sales of 4.494 million kiloliters, up 3.5%; products above mid-to-high-end reached 3.32M kiloliters, up 5.2%. However, ton price did not rise but fell. PuYin International’s research report directly pointed out that since Q3, the decline in beer consumption, intensified promotions, and pressure on on-premise channels in China have led to weaker revenue growth. Although the growth of mid-to-high-end products has driven product upgrades, increased promotions and a shift in channel structure from on-premise to household channels have caused the average selling price to decline.

In simple terms, promotional activities and channel changes offset the benefits of product structure upgrades.

Besides product upgrades, raw material cost reductions have been a key factor in profit improvement in recent years. In 2025, direct material costs in the beer segment decreased by 5.31% year-on-year, boosting gross profit margins. Meanwhile, sales expense ratio declined, leading to a net profit growth rate higher than revenue growth. In 2023, operating costs accounted for 61% of revenue, dropping to 58% in 2025.

However, this dividend may be coming to an end. The core raw materials for beer are barley and packaging materials. In December 2025, barley prices stabilized, but glass and aluminum prices began rising. If prices continue to increase in 2026, costs will inevitably rise.

For Qingdao Beer, in a market characterized by stock competition and monopolized by industry giants, further growth through nationwide expansion or premiumization will not be easy.