Vitasoy: Hong Kong's business has not been affected by demonstrations.

Financial News

Written by: Yue Yueting

2019-11-21 18:25

The interim net profit of Vitasoy International (0345) increased by 3% year-on-year to 533 million yuan; revenue increased by 5% year-on-year to 4.684 billion yuan, of which the income of the mainland business increased by 8%, and the income of Hong Kong business remained unchanged. Executive Director Lu Botao said that the slowdown in mainland business growth was only due to the strong performance in the same period last year, which made the base higher. In the first half of this year, the mainland business still maintained a certain growth, and its performance was even better than its peers. The operating profit of the Hong Kong business decreased by 10% year-on-year, mainly due to the slower-than-expected innovation implementation plan and the upgrading of production and logistics infrastructure, which led to pressure on operating profit.

The demonstrations in Hong Kong continued and the public's desire for consumption declined. Lu Botao revealed that the group's business has not been affected by social events. He estimates that because the public has reduced their travel time and stayed at home for a longer period of time, they will purchase a large number of products from the group. Sales from July to September are even better than the first quarter. However, as Hong Kong is in a recession, the Group will closely monitor the market conditions.

Expanding supply sources, etc.

Australia has a severe drought this year that will affect soybean supply. Lu Botao said that the Group's pick-up and sales are all in the same market, which can also reduce the impact of exchange rate fluctuations and create a hedging effect. Therefore, the shortage of Australian soybean supply will only affect the Australian and New Zealand businesses. The Group will expand its supplier channels and import soybean by-products. As for the raw materials for the sale of Vitasoy in Hong Kong, it is imported from Canada and is therefore not affected.

Chief Financial Officer Liu Jiancheng added that the Group's gross profit margin increased by 1 percentage point to 55% in the first half of this year, mainly because soybean prices fell compared with the same period of last year. For example, one ton of mainland soybeans fell from 6,000 yuan to 5,500 yuan. The Group has already signed an order agreement with long-term partners to reserve sufficient quantities of raw materials. It is believed that the increase in raw material prices has little impact on the business and there is no plan to increase the price.

After the performance, the stock price closed down 7.7%

After the results were announced, the price of Vitasoy fell sharply, closing at 30 yuan, down 7.69%. Executive Chairman Luo Youli believes that before the announcement of the results, the stock price of the group has reached a very high level. "It is unrealistic" and it is only returning to normal level.

[Transaction stocks] After the performance of Vitasoy, the stock price fell by nearly 8%

Vitasoy earns 3% in the medium term and pays 3.8 cents.

Company performance Vitasoy