How China's State-Owned Breweries Are Outperforming Global Giants
Jean Jacques André｜WorkN'Play- Apr 29
- 4 min read
Why You Should Pay Attention to China's Brewing Champions
In an industry dominated by household names like Heineken, Carlsberg, and Anheuser-Busch, two Chinese state-owned enterprises are quietly outperforming their Western counterparts. Beijing Yanjing Brewery and Tsingtao Brewery have emerged as the highest-rated beer producers according to WorkN'Play's Corporate Intelligence App. This sophisticated computational model, which processes over 500,000 mathematical calculations to benchmark corporations on management accounting and financial indicators, places these Chinese breweries at the top of global rankings. While Yanjing Brewery has developed a competitive edge through its "high-quality development" approach and Tsingtao leverages its century-old heritage, the objective data reveals there's more to their success than their public narratives suggest.
The Numbers Don't Lie: Overall Performance Analysis
Standout Strengths
Beijing Yanjing Brewery and Tsingtao Brewery dominate the overall performance rankings with scores of 66.52 (Very High) and 60.44 (High) respectively, significantly outperforming international competitors like Carlsberg (53.92), Asahi Group (52.98), Anheuser-Busch (50.02), and Heineken (48.20). These Chinese breweries excel particularly in working capital management, profitability management, and total shareholder return. Most impressively, Beijing Yanjing Brewery achieved a perfect 100.00 score in total shareholder return, while both companies demonstrated exceptional economic value added management with ratings above 88.
Areas for Improvement
Despite their overall success, both companies have weaknesses in human capital management, with Beijing Yanjing Brewery scoring 41.67 (Low) and Tsingtao Brewery scoring just 28.33 (Very Low). These scores lag significantly behind industry leader Heineken (75.00). Production asset management is another area where both Chinese breweries fall short, with Beijing Yanjing Brewery scoring 50.00 (Low), and Tsingtao scoring 55.56 (Medium Upper), trailing behind top performer Carlsberg (68.52).
Breaking Down the Competitive Edge: Key Performance Areas
Human Capital Management: Productivity at a Cost
Both Chinese breweries rank among the lowest in human capital management. Their weak performance stems from several factors. Despite increasing revenue per employee (Yanjing +18.4%, Tsingtao +15.8%), both breweries lag significantly in absolute productivity – Yanjing's revenue per employee is only $73,000 and Tsingtao's $154,000, far below the industry average of $368,000. Additionally, both companies are reducing headcount and payroll costs as a percentage of expenses. These metrics reveal that their human capital strategy prioritizes cost-cutting over productivity optimization and talent development – a short-term approach that could impact innovation and growth potential.
Bargaining Power: Strategic Supplier-Customer Management
Both breweries demonstrate high bargaining power (61.67), surpassed only by Asahi Group (68.33) and Carlsberg (65.00). Their impressive days sales outstanding metrics dwarf the industry average, indicating exceptional ability to collect payment. However, they maintain relatively short days payable outstanding periods compared to the industry average.
Cost Management: Controlling Production Costs
Beijing Yanjing Brewery and Tsingtao Brewery both score high in cost of goods sold management (64.81 and 59.26 respectively). Yanjing maintains lower cost of material consumed (45.8% vs. industry 52.3%), while Tsingtao has kept its 3-year increase in material costs to just 2.9% compared to the industry average of 8.0%. Yanjing has also reduced its days inventory outstanding by 17.4%, showing improved inventory efficiency.
Asset Utilization: Inefficient Capital Deployment
Both breweries underperform in production asset management. Their weakness stems from several critical issues. Beijing Yanjing's low productive asset investment ratio (0.7 vs. industry average 0.9) indicates underinvestment in core production capabilities. While Tsingtao's ratio is better at 1.5, both companies show concerning trends in capital expenditure. They also struggle with balancing their capacity utilization, as evidenced by Yanjing's high inventory holding. The data suggests potential overcapacity issues or inefficient production scheduling, requiring more strategic approaches to asset investment, capacity planning, and capital management to compete with Carlsberg's industry-leading asset management practices.
Marketing and Administrative Efficiency: Lean Operations
Beijing Yanjing Brewery excels in marketing, selling, general and administrative expenses management (60.00, Very High), while Tsingtao Brewery performs well (53.33, Medium Upper). Both maintain significantly lower SG&A expenses (Yanjing: 15.3%, Tsingtao: 20.3%) compared to the industry average of 32.4%. Tsingtao has improved its return on these expenses by 16.1% over three years, outperforming the industry average of 7.1%.
R&D Investment: Future-Focused Development
Both Chinese breweries demonstrate strong research and development expenditure management, with Beijing Yanjing scoring 46.30 (Medium Upper) and Tsingtao scoring 50.00 (High). Most notably, Tsingtao has increased its R&D expenditure as a percentage of total expenses by 146.5% over three years, though its actual percentage (0.3%) remains below the industry average (0.6%).
Working Capital Excellence: Industry-Leading Performance
Beijing Yanjing Brewery and Tsingtao Brewery dominate working capital management with Very High ratings (87.50 and 83.33 respectively). Both maintain working capital ratios of 1.8, substantially higher than the industry average of 0.7. Their working capital to revenue ratios are significantly better than the industry average, indicating strong operational liquidity.
Profitability Leadership: Remarkable Earnings Growth
Both breweries excel in profitability management (both scoring 75.93, Very High). While their gross profit margins are slightly below industry average, their operational improvements are striking. Beijing Yanjing has increased its operating profit margin by 73.5% and net profit margin by 89.0% over three years, while Tsingtao has achieved increases of 18.4% and 15.2% respectively.
Debt Management: Conservative Financial Strategy
Beijing Yanjing Brewery leads in corporate debt management (55.56, Very High), with Tsingtao Brewery performing adequately (40.74, Low). Both maintain leverage rates below industry average (Yanjing: 153.3%, Tsingtao: 179.4% vs. industry 257.7%) and negative net debt to gross profit ratios, indicating they hold more cash than debt.
Shareholder Value Creation: Exceptional Returns
Beijing Yanjing Brewery achieves a perfect score (100.00) in total shareholder return management, with Tsingtao Brewery also performing strongly (66.67, Medium Upper). Yanjing's share price has increased by 47.6% over three years (vs. industry decline of 3.6%), while its dividend per share has grown by an astonishing 221.8%. Tsingtao has increased its dividend per share by 90.9%, also significantly outperforming the industry average of 28.3%.
The Value of Data-Driven Analysis in the Brewing Industry
The comprehensive analysis provided by WorkN'Play's Corporate Intelligence App reveals nuances that press releases often obscure. While Beijing Yanjing Brewery and Tsingtao Brewery promote their brand strength and production capacity in public communications, the data shows their real competitive advantages lie in efficient operations, strong working capital management, and exceptional shareholder returns. The App's focus on momentum rather than static snapshots provides unique insight into the trajectory of these companies, demonstrating how state-owned enterprises can sometimes outperform private corporations in key financial metrics. By crunching over 500,000 calculations across 65+ indicators, the WorkN'Play platform developed by Jean Jacques André offers an objective lens for evaluating corporate performance beyond marketing narratives.
