Strengthen leading position in the B2B coffee and tea products market; Seeks deepen market penetration of the Mainland China market

Highlights

• Revenue reached HK$1,071.2 million, representing an increase of 12.2% ascompared with last year
•  Gross profit amounted to HK$333.1 million, representing an increase of15.0% as compared with last year
• Profit attributable to owners of the parent for the year reached HK$75.8 million, representing an increase of 64.4%as compared with last year
• Adjustedprofit attributable to owners of the parent* increased by 17.4% to HK$90.0million
• Continues tocapture the growth in the B2B coffee and tea products market in Hong Kong andMainland China
• Plans tostrengthen frozen meat and frozen processed food products business and expandproduct offerings
• Seeks deepenmarket penetration of the Mainland China market

FinancialHighlights

*Excluding a number of nonrecurringincome, costs and charges and certain of other non-cash charges

HONG KONG, CHINA - Media OutReach - 5 March 2019 - Tsit Wing International Holdings Limited("Tsit Wing", together with its subsidiaries, the "Group"; stock code: 2119),an integrated B2B coffee and black tea solutions provider, announced its annualresult. For the year ended 31 December 2018 (the "Reporting Period"), Tsit Wingrecorded a total revenue of HK$1,071.2 million (2017: HK$954.6 million),representing an increase of 12.2% which was primarily due to the increase inrevenue derived from the beverage solutions business, and to a lesser extent,the growth in revenue derived from the food products business. Gross profitincreased to HK$333.1 million (2017: HK$289.6 million), representing anincrease of 15.0%.

If a number of nonrecurring income, costs and chargesand certain of other non-cash charges was excluded, adjusted profitattributable to owners of the parent reached HK$90.0 million (2017: HK$76.7million), representing an increase of 17.4%.

The Board has proposed the payment of a final dividend of HK5.78cents per ordinary share in respect of the year ended 31 December 2018 (2017:HK1.62 cents per ordinary share).

Business Review

The Group is a leading integrated B2Bcoffee and black tea solutions provider in Hong Kong, Macau and Mainland Chinaproviding one-stop coffee and tea solutions to commercial customers. The Groupalso expanded the business scope and commenced frozen meat and frozen processedfood business in Hong Kong and Mainland China.

Beverage solutions

During theReporting Period, revenue from the beverage solutions segment increased toHK$808.7 million (2017: HK$711.3 million), representing an increase of 13.7%. Therevenue growth in beverage solutions segment was primarily because of theincrease in revenue derived from tea and instant beverage mix products inMainland China. Gross profit increased by 16.6% to HK$308.1 million (2017:264.3 million), mainly in line with the increment in revenue. Gross profit marginincreased to 38.1% (2017: 37.2%), primarily because of the relatively highergross profit margin generated from tea and instant beverage mix products.

Food products

During theReporting Period, revenue from the food products segment increased to HK$262.5million (2017: HK$243.3 million), representing an increase of 7.9%. The revenuegrowth in food products segment was primarily because of the increase in (i)the sales of frozen meat products as a result of pricing strategy of the Group;and (ii) the sales of frozen processed food products as a result of theexpansion of such business in Hong Kong.

Revenue by geographic locations

During the Reporting Period, revenue generated in Hong Kong increased by 6.0% toHK$739.2 million (2017: HK$697.4 million), primarily because of increase insales of coffee, tea and milk product as a result of growth in customers'demand. Revenue generated in Mainland China increased by 31.4% to HK$314.0million (2017: HK$238.9 million), mainly because of the increase in revenue derivedfrom instant beverage mix products in Mainland China. Revenue generated inMacau increased by 6.7% to HK$11.9 million (2017: HK$11.2 million), primarilybecause of increase in sales to a new customer.

Business Prospect

As a leading integrated B2B coffee and black teasolutions provider in Hong Kong, Macau and Mainland China, the Group will endeavourto take more marketing initiatives to capture the growth in the B2B coffee and teaproducts market in Hong Kong and Mainland China, in order to strengthen itsleading position in the market. Also, the Group seeks deepen its marketpenetration, particularly focusing on the Mainland China market which isexpected to experience considerable growth, to maintain a high growth rate.

The Group will further strengthen its ability to provide food andbeverage products solutions to its customers by exploring potential businessesof other strategic arrangements with entities which have the product portfoliosdemanded by customers and distribution network to expand the Group'sdistribution network.

The Group also strengthen its frozen meat and frozen processed foodproducts business and expand its product offerings by entering into a strategiccooperation agreement with NH Foods for the sale of frozen, fresh, precooked processedmeat and seafood products and a memorandum of understanding with F&N to explorebusiness and product development opportunities for the supply, distribution,cobranded promotion and co-development of beverage products and/or beveragesolutions in July 2017 and April 2018, respectively.

Leveragingon the Group's experience in providing frozen meat and frozen processed food,the Group aims to provide tailor-made frozen meat and processed food productsto satisfy the needs of its well-established and diverse customer base in HongKong, Macau and Mainland China and enhance its product portfolio. Furthermore,the Group will continue to take on more strategic alliance initiatives andexplore business development opportunities with various business partners forthe supply, distribution, co-branded promotion and co-development of beverageproducts and/or beverage solutions. It is believed that building on the Group'sleading market position and well-established distribution network could fullyutilize the distribution channels and optimize efficiency.

About Tsit Wing International Holdings Limited

TsitWing is a leading integrated B2B coffee and black tea solutions provider inHong Kong, Macau and the PRC with 86-year heritage. In 2017, coffee sold by theGroup can be made into most 337.7 million cups of coffee per year; tea sold canbe made into most 403.2 million cups of milk tea per year. Tsit Wing commencedits frozen meat business in Hong Kong and the PRC from 2013.

Accordingto the Frost & Sullivan Report, Tsit Wing is the largest B2B coffee andblack tea solutions provider in Hong Kong in 2016 with 24.5% of the marketshare in terms of B2B revenue.