Natural Food International Announces 2018 Annual Results

March 30, 2019 - 09:53
Natural Food International Announces 2018 Annual Results

Recorded a Comprehensive Solid Growth Revenue Increased by 15.4% y-o-y to RMB1,818.1 million

 

ResultsHighlights

 

  • Revenueincreased by 15.4% to RMB1,818.1 million y-o-y
  • Adjustednet profit[1] increased by 13.0% to RMB213.0million y-o-y
  • Recommendedthe payment of a final dividend of RMB0.02 per ordinary share
  • Revenuefrom online channels including both E-commerce platforms and WeChat Members Store,increased significantly by 64.0% y-o-y
  • Numberof concessionary counters increased to 3,895, revenue from which increasedto RMB1,478.7million


FinancialHighlights

 

Year ended 31 December

/As at 31December

 

RMB'000

2018

2017

Change

Revenue

1,818,066

1,576,145

+15.4%

Gross profit margin

76.5%

76.3%

+0.2 ppt

Adjusted net profit1

213,001

188,461

+13.0%

Adjusted net profit margin

11.7%

12.0%

-0.3 ppt

 

 

 

 

Cash and cash equivalents

604,913

227,119

+166.4%

Gearing Ratio

5.0%

30.8%

  -25.8 ppts



HONGKONG, CHINA - Media OutReach - 29 March2019 - Natural Food InternationalHolding Limited ("Natural Food International", the "Company", together withits subsidiaries, the "Group"; stock code: 1837.HK), a well-recognised natural health foodcompany in China, is pleased to announce its annual results for the year ended31 December 2018 ("the year under review") today. The Group's revenue for theyear under review amounted to approximately RMB1,818.1 million (2017: RMB1,576.1 million), representingan increase of 15.4%. The Board has recommended the payment of a final dividendof RMB 0.02 per ordinary share.

 

The year of 2018 was a crucial year tothe business development of the Group. The Group successfully listed on theMain Board of The Stock Exchange of Hong Kong Limited on 12 December 2018.Meanwhile, the Company continued to expand its business and resulted in acomprehensive solid growth in the results.


During the year under review, revenuefrom online channels increased significantly by 64.0% to RMB339.4 million,while Revenue from offline channels increased steadily by 8.0% to RMB1,478.7million.

 

Business Review

Rapid increase in productiterations, remarkable contribution from new products

During the year under review, leveraging its strong R & Dcapabilities and market leading position, the Group has launched 42 popularnatural healthy food products, that cater to specific needs of differentconsumer groups, such as pregnant women, the elderly and teenagers. The rapidincrease in product iterations has led to an increase in the proportion of newproduct revenue contribution. In 2018, revenue of new products contributed19.7%, 27.9% and 31.6% to revenue by different sales channels, namely, offlinechannels, E-commerce platforms and WeChat member store, respectively.Meanwhile, the number of registered members of the Group has increased to 20.5 million.Furthermore, to ensure scientific product ingredient ratio and keep the nutritionalbalance, the Group jointly launched "Wugu Mofang Grain Nutrition ResearchCentre" ( 五谷磨房穀物營養研究中心) with Chinese Nutrition Society ( 中國營養學會) in 2018 todevelop reliable natural health food.

 

Continuously improved Market Penetration,stable sales growth from all channels

The Group'ssales channels are highly integrated to jointly create the New Retail model andcomplement different channels' advantages. Regarding the offline channels, in2018, the Group operated 3,895 concessionary counters in supermarkets in 461cities across China. During the year under review, the Group strengthened andupgraded channel strategic cooperation with key customers, as well as newlyopened 851 concessionary counters, which increased the offline marketpenetration. In addition, the Group conducted store management reform by graduallyimplementing the internal partner mechanism, and to revitalized the vitality ofoffline business operations.

 

Onlinechannel performance is remarkable. Revenue from e-commerce platforms, such asTmall, JD.com, and Vipshop.com, increased significantly by 66.4% to RMB239.2million; Revenue WeChat member stores also increased significantly by 58.4% toRMB100.2 million.

 

International standardized safe productionand supply chain

In 2018, theGroup acquired the FSSC22000 Food Safety Certification System, whichdemonstrates that their quality control meets international best standards. TheCompany sources high-quality ingredients globally to ensure product quality,and guarantees safe production and high quality standards through completeproduction facilities and optimized production processes, while also reducesproduction time.

 

The companycurrently owns two production and processing bases with a utilization rate ofapproximately 90%. To meet theincreasing demand of natural food in China, in March 2018, the Group commencedconstruction of the first phase of its new manufacturing facility in NanshaCounty, Guangzhou, China for a manufacturing facility for various kinds ofproducts. The new production facility has a total gross floor of approximately60,000 square metres. After the completion of the new manufacturing facility,the Group's estimated production capacity will increase to 40,000 tons peryear.


Looking ahead, Mrs.  GUIChangqing, Chairlady andExecutive Director of Natural Food InternationalHolding Limited, said,"The Listing represents asignificant milestone in the development of the Group. Becoming a listedcompany strengthens our capital base and enhances our corporate image and brandrecognition. Benefiting from the growing purchasing power andrising health awareness of Chinese consumers, we remain full of confidenceabout our future. The Group will continue to maintain and strengthen itsleading market position and create more values for our shareholders."



[1] Adjusted net profitrepresents profit for the year before loss on fair value changes of convertibleand redeemable preferred shares and expenses incurred in connection with theGlobal Offering

About the Group

NaturalFood International Holding Limitedis the second largest natural health food company in China as measured byretail sales value in 2017, according to Frost & Sullivan. Its brand "WuguMofang"(五谷磨房) ranked first in terms of top-of-mind brand awareness and customersatisfaction among all the natural health food brands in China and as the mostfrequently consumed brand among all the natural health food products in China.Infused with modern nutrition science and food processing technologies, theextensive diversified product portfolio includes over 100 types of products.

E-paper