August 17, 2018 / 5:32 AM / a month ago

UPDATE 1-China Resources Beer H1 profit rises 29 pct on higher prices

* Net profit 1.5 bln yuan in 6 mnths to end-June

* Co says overall beer sales volume falls 1.5 pct in H1

* Average selling price up 13 pct

* Says Heineken deal to boost presence in China’s premium mkt (Adds company comment, updates shares)

By Donny Kwok

HONG KONG, Aug 17 (Reuters) - China’s top brewer China Resources Beer (Holdings) Co Ltd posted a 29 percent rise in first-half net profit on Friday thanks to higher prices and improved sales of premium beers, a trend it said would continue.

The owner of the Snow beer brand - which out-sells all others but is almost unknown outside China - said profit rose to 1.51 billion yuan ($219.4 million) for the six months ended June, up from 1.17 billion yuan a year earlier.

Revenue increased l1.4 percent to 17.57 billion yuan.

The overall average selling price climbed 13 percent from a year earlier, amid growth in the proportion of total sales from higher-margin mid- to high-end beers.

“Looking ahead, competition is expected to remain fierce in the industry,” Chairman Chen Lang said in a statement.

The brewer would develop new products and broaden its portfolio to meet growing demand for premium and differentiated beers, he added

Heineken, the world’s No. 2 brewer, is taking a $3.1 billion stake in the parent of China Resources Beer to tap a growing thirst for premium brands in the world’s biggest beer market.

“This long-term strategic collaboration will provide an important strategic opportunity for the group to strengthen its presence in the premium beer market in China,” Chen said, adding Heineken could help the company expand overseas.

Heineken opted for the tie-up after it had struggled to compete with the dominant players in China’s premium lager market, such as Anheuser-Busch InBev and Carlsberg .

The Chinese brewer said overall beer sales volume fell 1.5 percent year-on-year to 6.2 million kilolitres during the period.

The volume of beer sold in China has been declining since 2013 and is expected to shrink further this year amid shifting consumer tastes.

But the premium beer segment, which includes craft beer, has grown by double digits annually since at least 2012, according to market research group Euromonitor.

Rival Tsingtao Brewery is due to release its interim results on Tuesday.

Shares of China Resources Beer rose 0.6 percent after the results statement, in line with the benchmark index. ($1 = 6.8841 Chinese yuan) (Reporting by Donny Kwok; Editing by Gopakumar Warrier and Stephen Coates)

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