Huiyuan targets larger market share

PUBLISHED : Wednesday, 02 April, 2008, 12:00am
UPDATED : Wednesday, 02 April, 2008, 12:00am

China Huiyuan Juice Group, the country's biggest pure juice and nectar maker, aims to become the top juice beverage producer in three years after a recently launched product received positive feedback.

Huiyuan's aggressive plan is aimed at challenging larger rivals such as Coca-Cola, which owns Qoo branded drinks, Hong Kong-listed food and beverage company Uni-President, and Tingyi (Cayman Islands) Holding Corp.

Huiyuan held 6 per cent of the diluted juice drink market by sales value last year, ranking fourth, compared with about 30 per cent each for Uni-President and Coca-Cola.

Chairman Zhu Xinli said the company expected the new kiwi juice beverage to boost its market share.

'The kiwi juice we launched at the beginning of this year was well received by consumers,' said Mr Zhu. 'It is the first of its kind in the market. We will use this product to differentiate ourselves from other brands.'

He said the company aimed to maintain its leading position in the high-end pure juice and nectar market as it expanded into diluted juice drinks to maintain its overall margin.

Huiyuan derived 29.4 per cent of its total revenue from diluted juice drinks, with nectars and pure juice accounting for 42.2 per cent and 22.4 per cent, respectively.

'The company wants to achieve growth through diluted juice drinks as the sector has much more potential to improve than its nectar and pure juice business,' said an analyst with a Taiwanese fund house.

'The company hopes it can increase sales volume while maintaining current gross profit margin.'

Huiyuan yesterday reported that revenue grew 28.6 per cent to 2.66 billion yuan (HK$2.96 billion) last year from 2.07 billion yuan a year earlier. Gross margin rose to 35.7 per cent from 32.7 per cent.

A survey of 10 analysts by Thomson Financial estimated that Huiyuan's revenue would rise 29.2 per cent to 2.67 billion yuan.

Net profit soared 188.9 per cent to 640.22 million yuan from 221.6 million a year earlier, driven by interest income from an initial public offering last year and gains from convertible bonds.

Interest income from its share offering was 206.8 million yuan and fair value gains from convertible bonds reached 136.05 million yuan.

Huiyuan shares closed down 0.34 per cent at HK$5.83 yesterday. A final dividend of 10.9 fen per share was declared.

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