China. New CR Snow team will have to work on the company’s profitability

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The merger of two brewing giants AB InBev and SABMiller against the background of the Chinese beer market drop provided an opportunity for China Resources Beer cheaply buy back shares from the foreign partner.

CR Snow Breweries has already formed a new management team which will determine the future policy of the company. In this regard, Thailand Securities Source analysts evaluated the prospects of the brewery’s development.

CR Breweries has a great opportunity to improve the rates of its activity, if they focus on stable growth of business profitability. So far, CR Snow net profit margin is only about 3.2%, which is less than that of Tsingtao and Yanjing Brewery.

The experts see two main reasons for this low profitability of the brewery: 1) the rapid expansion of the company; 2) low price of the wine (2500 yuan), which competes with beer.

Currently, the purchase of CR Snow and the change of management will contribute to the consolidation of forces and increase the profitability of the company.