The Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. TSINGTAO BREWERY COMPANY LIMITED (a Sino-foreign joint stock limited company established in the People s Republic of China) (Stock Code: 168) 2013 First Quarterly Report This announcement is made pursuant to the disclosure requirements of Rule 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The quarterly report (unaudited) contained in this announcement has been prepared in accordance with China Accounting Standards of Business Enterprises and in accordance with the requirements on preparation and disclosure of quarterly report issued by China Securities Regulatory Commission, and has been approved by the Board of Directors of Tsingtao Brewery Company Limited (the Company or the Company ). The original text of the quarterly report is in Chinese. 1. IMPORTANT NOTICE 1.1 The Board of Directors (the Board ), the Board of Supervisors and their directors, supervisors and senior management officers of the Company undertake that this report contains no false representation, misleading statement or material omission, and jointly and severally accept full responsibility for the authenticity, accuracy and completeness of its content. 1.2 The first quarterly report for 2013 has been considered and approved by way of voting through communications at the twelfth meeting of the Seventh Board (the Meeting ). The effective votes at the Meeting were 10 affirmative votes. 1.3 The first quarterly financial report of the Company has been reviewed by the Audit & Internal Control Committee under the Board, but has not been audited. 1.4 SUN Ming Bo, the legal representative of the Company, and YU Zhu Ming, Chief Accountant & Head of Finance Management Department declare that the financial report contained in this quarterly report is true and complete. 1
2 BASIC INFORMATION OF THE COMPANY 2.1 Major accounting information and financial indicators As at the end of the reporting period As at the end of prior year Currency: RMB Increase/ Decrease from the end of prior year (%) Total assets (Yuan) 25,192,960,727 23,661,105,585 6.47 Owners equity (or shareholders equity) (Yuan) 12,956,731,949 12,467,953,010 3.92 Net assets per share attributable to shareholders of the Company (Yuan/share) 9.59 9.23 3.92 From the beginning of the year to the end of the reporting period Increase/ Decrease from the corresponding period of prior year (%) Net cash flow from operating activities (Yuan) 1,590,490,438 33.24 Net cash flow per share from operating activities (Yuan/share) 1.18 33.24 2
Reporting period From the beginning of the year to the end of the reporting period Currency: RMB Increase/ Decrease from the corresponding period of prior year (%) Net profit attributable to shareholders of the Company (Yuan) 487,977,516 487,977,516 8.30 Basic earnings per share (Yuan/share) 0.361 0.361 8.30 Basic earnings per share after deducting non-recurring profit or loss (Yuan/share) 0.331 0.331 11.61 Diluted earnings per share (Yuan/share) 0.361 0.361 8.30 Weighted average return on net assets (%) 3.84 3.84 Decreased 0.13 percentage points Weighted average return on net assets after deducting non-recurring profit or loss (%) 3.52 3.52 Decreased 0.02 percentage points Summary of non-recurring profit or loss: Unit: RMB Yuan Item Amount Profits/(Losses) on disposal of non-current assets -426,900 Government grants recognised in the profits/(losses) of the period (excluding those in certain amount or in set amount which are closely related to the usual operations of the Company and in compliance with the State laws and regulations) 49,548,672 Other non-operating incomes and expenses other than the aforesaid items 896,525 Affected amount of income tax -7,487,470 Affected amount of minority shareholders interests (after-tax) -2,242,349 Total 40,288,478 3
2.2 List of total number of shareholders and top ten holders of listed shares not subject to trading restriction as at the end of the reporting period Unit: share Total number of shareholders as at the end of the reporting period (shareholder) 20,463 Particulars of top ten holders of listed shares not subject to trading restriction Name of shareholders (Full name) Tsingtao Brewery Group Company Limited ( Tsingtao Group, Note 1) HKSCC Nominees Limited (Note 2) Asahi Group Holdings Ltd. China Jianyin Investment Company Ltd. Taikang Life Insurance Co., Ltd. Dividends Personal dividends 019L FH002Hu China Merchants Securities Co., Ltd. Customer Credit Transaction Guarantee Securities Account ICBC E Fund Value Growth Mixed Securities Investment Fund International Finance HSBC JP Morgan Chase Bank, National Association Guotai Junan Securities Co., Ltd. Customer Credit Transaction Guarantee Securities Account Industrial Bank Co., Ltd. Xingquan Trend Investment Mixed Securities Investment Fund Number of listed shares not subject to trading restriction held as at the end of reporting period Class of shares 411,400,050 RMB-denominated and foreign shares listed overseas 373,786,454 Foreign shares listed overseas 270,127,836 Foreign shares listed overseas 17,574,505 RMB-denominated 17,315,357 RMB-denominated 16,889,181 RMB-denominated 13,499,563 RMB-denominated 8,517,680 RMB-denominated 8,316,208 RMB-denominated 7,025,222 RMB-denominated Note: 1. Tsingtao Group holds 7,944,000 shares of H-share in the Company through a wholly-owned subsidiary, and 403,456,050 shares of A-share in the Company by itself. 2. The H-shares are held by HKSCC Nominees Limited on behalf of different clients, excluding the H-shares held by the wholly-owned subsidiary of Tsingtao Group. 4
3 Significant Events 3.1 Brief analysis of overall operating activities during the reporting period During the reporting period, the Company realized continuous growth in sales volume, incomes and profits through actively expanding the market. As a result, the sales volume of beer reached 18.29 million hl, increased by 11.7% on a year-on-year basis; the revenues reached RMB6.312 billion, increased by 12.7% on a year-on-year basis; net profits attributable to shareholders of the Company reached RMB488 million, increased by 8.3% on a year-on-year basis. The sales volume of Tsingtao beer, its principal brand, reached 10.46 million hl, increased by 10.4% on a year-on-year basis, in which the sales volume of high-end products including Tsingtao draft and canned beer reached 3.75 million hl, increased by 20.6% on a year-on-year basis; the sales volume of the products of the secondary brands reached 7 million hl, increased by 14.2% on a year-on-year basis. 3.2 Material changes of accounting items and financial indicators and the reasons 3Applicable N/A Unit: RMB 000 Yuan 1. Items in balance sheet As at the end of this reporting period As at the end of prior year Increased/ Decreased amount Percentage Cash at bank and on hand 8,391,102 7,118,248 1,272,854 17.88% Notes receivable 104,753 61,800 42,953 69.50% Accounts receivable 202,787 82,685 120,102 145.25% Advances to suppliers 130,057 83,739 46,318 55.31% Interests receivable 94,558 63,996 30,562 47.76% Other receivables 131,702 87,292 44,410 50.88% Other current assets 175,788 284,314-108,526-38.17% Other non-current assets 259,864 195,910 63,954 32.64% Taxes payable 579,567 350,866 228,701 65.18% Payables for specific projects 189,649 120,064 69,585 57.96% 2. Items in income statement Jan-Mar 2013 Jan-Mar 2012 Increased/ Decreased amount Percentage Revenue 6,311,912 5,599,765 712,147 12.72% Cost of sales 3,705,221 3,403,203 302,018 8.87% Taxes and surcharges 513,272 452,907 60,365 13.33% Selling and distribution expenses 1,186,725 949,066 237,659 25.04% General and administrative expenses 302,164 269,331 32,833 12.19% Non-operating expenses 4,009 10,494-6,485-61.79% 5
3. Items in cash flow statement Jan-Mar 2013 Jan-Mar 2012 Increased/ Decreased amount Percentage Net cash flow from operating activities 1,590,490 1,193,725 396,765 33.24% Net cash flow from investing activities -512,426-596,470 84,044 14.09% Net cash flow from financing activities -18,719 35,815-54,534-152.27% (1) The cash at bank and on hand as at the end of the reporting period increased by 17.88% from the beginning of the reporting period, which was mainly due to the increase in net amount of cash flow from the operating activities during the reporting period. (2) The notes receivable as at the end of the reporting period increased by 69.50% from the beginning of the reporting period, which was mainly due to the increase in goods amount settled by way of the settlement of bank acceptance notes during the reporting period. (3) The accounts receivable as at the end of the reporting period increased by 145.25% from the beginning of the reporting period, which was mainly due to the increase in the balance of accounts receivable caused by the growth of sales volume during the reporting period. (4) The advances to suppliers as at the end of the reporting period increased by 55.31% from the beginning of the reporting period, which was mainly due to the increase in raw materials purchased by way of paying the goods amount in advance during the reporting period. (5) The interests receivable as at the end of the reporting period increased by 47.76% from the beginning of the reporting period, which was mainly due to the increase in the receivable interests generated from inter-banks deposits of Tsingtao Brewery Finance Liability Company Limited, a subsidiary of the Company, during the reporting period. (6) The other accounts receivable as at the end of the reporting period increased by 50.88% from the beginning of the reporting period, which was mainly due to the increase in the petty cash and advanced expenditures of some subsidiaries during the reporting period. (7) The other current assets as at the end of the reporting period decreased by 38.17% from the beginning of the reporting period, which was mainly due to the decrease in the prepaid income tax and value-added tax during the reporting period. (8) The other non-current assets as at the end of the reporting period increased by 32.64% from the beginning of the reporting period, which was mainly due to the increase in the prepayments for projects and purchasing equipment resulting from the increase in new constructions, technical reconstruction and expansion, and relocation projects of certain subsidiaries during the reporting period. 6
(9) The taxes payable as at the end of the reporting period increased by 65.18% from the beginning of the reporting period, which was mainly due to the increase in the payable value-added tax and consumption tax caused by the growth of sales volume and sales amount during the reporting period. (10) The payables for specific projects as at the end of the reporting period increased by 57.96% from the beginning of the reporting period, which was mainly due to the increase in the compensation received from the local governments for the relocation of some subsidiaries during the reporting period. (11) The revenue increased by 12.72% from the corresponding period in prior year, which was mainly due to the increase in revenue resulting from the growth of sales volume of principal products of the Company during the reporting period. (12) The cost of sales increased by 8.87% from the corresponding period in prior year, which was mainly due to the increase in cost of sales caused by the growth of sales volume of principal products during the reporting period. (13) The taxes and surcharges increased by 13.33% from the corresponding period in prior year, which was mainly due to the increase in various taxes including consumption tax caused by the growth of sales volume during the reporting period. (14) The selling and distribution expenses increased by 25.04% from the corresponding period in prior year, which was mainly due to the increase in investments to the market, brand promoting expenses and staff remuneration resulting from the expansion of market size caused by the growth of sales volume during the reporting period. (15) The general and administrative expenses increased by 12.19% from the corresponding period in prior year, which was mainly due to the increase in operational expenses and staff remuneration during the reporting period. (16) The non-operating expense decreased by 61.79% from the corresponding period in prior year, which was mainly due to the decrease in losses from disposing non-current assets caused by less relocation, technical reconstruction and expansion projects during the reporting period from the corresponding period in prior year. (17) The net cash flow from operating activities increased by 33.24% from the corresponding period in prior year, which was mainly due to the increase in cash received for the service provided when selling the goods during the reporting period. (18) The net cash out-flow from investing activities decreased by 14.09% from the corresponding period in prior year, which was mainly due to the decrease in cash paid for purchasing and building the fixed assets during the reporting period from the corresponding period in prior year. (19) The net cash out-flow from financing activities was RMB18,719,000, while the net cash inflow from financing activities in the corresponding period in priors year was RMB35,815,000, which was mainly due to the increase in capital investment to some subsidiaries by the minority shareholders in the corresponding period in prior year. 7
3.3 Analysis and explanation on the progress of significant events and their impacts and resolutions 3Applicable N/A As at the date of the publication of this report, the two joint-investment companies pursuant to the Framework Agreements entered into between the Company and Suntory (China) Holding Co., Ltd. on 5 June 2012 have been established, and the main reorganisation procedures including increasing investment and transfer of equity interests have also been completed. The transaction is still pending consummation of the formal completion procedures. 3.4 Implementation of undertakings made by the Company, shareholders as well as actual controlling parties 3Applicable N/A During the Company s share reform, the former controlling shareholder, the State-owned Assets Supervision and Administration Commission of Qingdao, committed to propose to the Board of the Company for setting up and implementing the long-term incentive program including stock option after the completion of the share reform. In April 2007, after Tsingtao Group becoming the Company s controlling shareholder through the unconditional transfer, it had accepted all obligations which should be taken by the State-owned Assets Supervision and Administration Commission of Qingdao and all undertakings required to be made by it after the implementation of the proposed share reform of the Company. Tsingtao Group is serious to the related undertakings and has been conducting research on the subject, seeking the feasible incentive program, and will promote the implementation at the appropriate time in the future. 3.5 Any predictable substantial losses in accumulated net profit from the beginning of the year to the end of next reporting period or warnings or causes for any substantial variance from the corresponding period in prior year Applicable 3N/A 8
3.6 Implementation of cash dividends policy during the reporting period According to the profit distribution proposal for the year 2012 as considered and approved at the eleventh meeting of the seventh Board, the Company proposed to distribute a final dividend of RMB0.40 (with tax) per share for the year 2012. This profit distribution proposal will be subject to the consideration and approval at the Company s 2012 Annual General Meeting to be held on 25 June 2013. For the unaudited balance sheet, income statement and cash flow statement of the Company as at 31 March 2013, please refer to the website of Shanghai Stock Exchange (http://www.sse.com.cn) and the Company (http://stock.tsingtao.com.cn). By Order of the Board Tsingtao Brewery Company Limited ZHANG Xue Ju ZHANG Rui Xiang Joint Company Secretaries Qingdao, the People s Republic of China 26 April 2013 Directors of the Company as at the date of this announcement are: Executive Directors: Non-executive Directors: Independent Non-executive Directors: Mr. SUN Ming Bo (Chairman), Mr. WANG Fan (Vice Chairman), Ms. JIANG Hong and Mr. SUN Yu Guo Mr. Fumio YAMAZAKI and Mr. CHEN Zhi Cheng Mr. WANG Xue Zheng, Mr. ZHAO Chang Wen, Mr. WU Xiao Bo and Mr. MA Hai Tao 9