Promulgation soon of a bacteria standard for seasoning bags should help Tingyi (Cayman Islands) Holding Corp overcome troubles linked to its instant noodles.
Setting of the standard by the health ministry was prompted by allegations that seasoning bags from some mainland noodle producers, including Tingyi, contained abnormal bacteria levels.
Bacteria scares caused Tingyi's shares to plunge almost 5 per cent to HK$2 on July 2. The shares had tested a high of HK$2.275 after flotation in February.
'We are looking forward to the announcement of the standard,' managing director Wei Ying-chiao said. 'We hope this will help dismiss the unreasonable claims on our instant noodles.' Unlike its rivals, Tingyi makes its own seasoning bags. It has 15 production lines producing 10.5 million bags of seasoning sauces and 137,700 bags of seasoning powder every day at its Tianjin factory.
Tingyi has relied solely on making and marketing instant noodles since its establishment in 1991. Last year, noodles yielded US$71.39 million net profit on sales worth US$339.34 million.
Mr Wei said he was confident about this year's profit growth despite about US$5 million in losses from a beverage launch in April. The losses, announced earlier, would be booked as provisions when interim results were unveiled next week.
He said the non-carbonated drinks were expected to break even by the end of the year when the profit margin would be lifted to 25-30 per cent and marketing of distilled water would be launched.
