Hong Kong-based consumer goods retailer China Resources Enterprise has reported a surge in 2012 profit as its retail and beer divisions capitalise on China's increased domestic consumption.
The China-focused brewer, food processer and distributor said its net income increased 31 percent to HK$3.9bn ($508m, £332m) in 2012 from HK$3bn a year earlier. Analysts polled by Bloomberg expected the company to record a profit of HK$3.35bn.
Excluding after-tax effect of asset revaluation and major disposals, the group's underlying profit attributable would have decreased by 19.2 percent.
Group turnover has increased by 14.6 percent to HK$126.2bn with sales at retail division improving by 19.1 percent and sales at beer division rising 5.2 percent.
"Despite market volatility in 2012, the Group continued to identify opportunities to further enhance its competitiveness," CEO Hong Jie said in a statement.
"Following its development strategy of national expansion emphasizing strong regional leadership and synergistic opportunities between its businesses, the Group further expanded and strengthened its leading position in China's consumer industry. This paved the way for the Group to weather any uncertainties and grasp opportunities when economy rebounds."
Same-store sales at the retail division rose 4.1 percent on year, due to higher prices for consumer goods, new store openings and the contribution of the newly acquired Jiangxi Hongkelong Department Store Investment Co. As at the end of 2012, the Group operated more than 4,400 stores in China, of which about 81 percent were self-operated.
In the beer division, total sales volume increased by 4 percent year-on-year in 2012 to about 10,639,000 kiloliters. China's best-selling Snow brand, which the company brews in partnership with SABMiller, accounted for more than 90 percent of the Group's total sales.
As at the end of 2012, the company operated more than 80 breweries in China with an annual production capacity of about 18,000,000 kiloliters. It agreed in February to acquire Guangdong-based Kingway Brewery's beer making assets for 5.4 billion yuan to boost its market share.
"The division has stepped up its marketing and promotional efforts in response to the intensifying market competition, which in turn hindered growth in operating profit," the company said.
Looking forward, the company expects the operating environment for the retail industry to remain challenging.
"We will continue to look for opportunities to team up with other market leaders where circumstances allow us to create synergies, especially for our retail and food divisions," chairman Chen Lang said.