White Collar | Beer firm’s reporting switch hard to swallow

China Resources Enterprise strongly believes that selling beer is so seasonal it has decided not to report quarterly results anymore.

The company announced last week it has completed the HK$28 billion deal to sell all its non-beer business to its parent China Resources Holdings. Its only business now is selling beer and will change its name into China Resources Beer.

“Given that the beer business is expected to exhibit strong seasonal patterns, it is considered that the quarterly results might not provide meaningful information to the shareholders and the investors and it might not be cost effective to continue with the company’s practice of publishing quarterly results. As such, quarterly results will no longer be published by the company,” the company said in announcing its name change.

While changing the name may make sense, the decision to stop doing voluntary quarterly reports and linking it to beer sales is not convincing.

Hong Kong listing rules require companies to announce their results every six months and the city is among the few advanced markets not requiring all firms to do mandatory quarterly reporting. But some companies such as Hong Kong Exchanges and Clearing and China Resources Enterprise are among the few who voluntarily do it.

Before it turned into a pure beer seller, China Resources Enterprise said in its first-quarter result the quarterly report is “a voluntary basis in pursuit of a higher standard of corporate governance and in promoting the company’s transparency”.