普华永道——Cheers_CDD draft 041203_Rev.ppt

7 - Historical performance 26 Project Cheers 12-4-03 15:24 A strategic decision was taken in 2002 to launch a mass market beer 27 Section 7 - Historical performance Shenzhen is one of the most wealthy cities in China. Being very close to Hongkong and the most famous special economic zone in China, the level of consumption and price of commodity are relatively higher than most of the other parts of the region and the country. The special location enables Kingway to enjoy a premium price compare to other local brewers in the rest part of China. However the average sales price has been tumbled during the last six years due to the severe competition especially from Tsingtao. Ward Shenzhen is one of the wealthiest cities in China. Quite near to Hong Kong, and the China’s special economic zone superstar, Shenzhen’s consumption levels and commodity prices are higher than most other areas in the region and country. The location allows Kingway to enjoy a premium price compared to local brewers in other parts of China. Despite economic indicators, average sales price has tumbled over the last six years as a result of the intense competition, particularly from the likes of Tsingtao. Although management attributes the large reduction in sales volume in FY01 to wet weather in Guangdong the first half of the year, it follows that the aggressive pricing and marketing activities of Tsingtao and other competitors is responsible for the decrease. FY98 – FY02 Volume CAGR 8.6% FY98 – FY03 ASP CAGR (8.0%) Project Cheers 12-4-03 15:24 28 Section 7 - Historical performance FY01 is the worst year of Kingway, both volume and value tumbled because its main competitors, especially Tsingtao adopted aggressive market and promotion method. Kingway made response in FY02 by sharply cutting down the ASP by Ward FY01 was the worst year in turnover for Kingway in recent history. Both volume and value tumbled because of competitive pressures. The FY01 reduction in turnover was in part mi