Tingyi lifts bottom line 18pc as sales shoot past US$1b mark
Tingyi (Cayman Islands) Holding Corp, which dominates China's instant noodle and beverage markets, said half-year profit increased 18 per cent as strong sales of its higher-margin drinks took revenue past US$1 billion.
Net profit climbed to US$66.5 million for the six months ended June from US$56.3 million a year earlier. Turnover increased 31 per cent to US$1.11 billion from US$846.6 million.
Tingyi, which makes instant noodles and beverages under the Master Kong brand, is benefiting as consumers spend more amid a booming mainland economy.
China's retail sales increased almost 14 per cent last month compared with July last year, the government said this week, in line with growth for the first seven months.
The company's revenue from beverages surged 66 per cent to US$552.2 million during the first half. The segment, which accounted for 49.7 per cent of turnover, had a gross margin of 38.6 per cent compared with the 25.3 per cent margin for instant noodles.
Sales of instant noodles, which accounted for 42.6 per cent of revenue, rose 7.4 per cent to US$473.6 million.
The company's overall gross margin was 32.93 per cent in the first half, up from 31.26 per cent a year ago.
Tingyi had 39.2 per cent of China's instant noodle market in June and 48.6 per cent of the instant tea market, the Tianjin-based company said, citing ACNielsen figures.
The company, which warned that raw material prices would remain at high levels in the second half, said it aimed to launch more varieties of instant noodles and continue to gain market share in the beverage market.
Tingyi had US$1.74 billion in net assets, US$231 million cash, and US$776 million debt at the end of June.
Net profit, which was announced before the market closed, was less than the 24 per cent estimate by JP Morgan and Deutsche Bank's 22 per cent estimate.
Tingyi shares yesterday dropped 0.4 per cent to close at HK$4.68.
