New | Flush with cash, China Resources Enterprise is ready to splash out on new beer brands

China Resources Enterprise is geared up for acquisitions in the domestic brewery market after selling all of its loss-making non-beer assets for HK$30 billion.

CRE, part of state-owned conglomerate China Resources (Holdings), yesterday said it would join hands with ally SABMiller to strengthen its already top position in the mainland market, where its Snow brand continues to be the most popular beer.

“With some HK$10 billion stand-by credit from our holding group and support from our partner SABMiller, we have plenty in our war chest for acquisitions in the domestic market,” said chief financial officer Frank Lai Ni-hium.

CRE reported a HK$4.3 billion net loss for the first half of this year, battered by a bloated retail division that the company sold back to parent in a radical restructuring in April.

The non-beer business, containing supermarket, food and beverage, was hit with a HK$5.4 billion deficit, of which HK$2.5 billion was goodwill impairment on Tesco China, which CRE bought last year.

The brewery division, the sole business left in CRE, recorded HK$528 million in net profit, up 30 per cent from the year-ago level.