Want Want China Holdings, one of the mainland's largest snack and beverage makers, rose up to 5 per cent yesterday after reporting a better-than-expected 17 per cent jump in net profit last year. Want Want shares, which dropped 3 per cent in the morning, rose 3.99 per cent to HK$7.82 in the afternoon trading session after the company released the annual results during the lunch break. The company, the mainland's largest producer of rice crackers, said net profit last year rose 17 per cent to US$419.5 million. That boost came mostly from an impressive sales revenue, which increased over 31 per cent to US$2.95 billion. The gross profit margin, however, fell 2.8 percentage points to 34.8 per cent. The company blamed the drop on the rising price of raw materials such as sugar, milk powder, potato starch, rice, palm oil and plastic packing materials, as well as a spike in labour costs. Bank of China International said in a research note that Want Want's net profit growth beat its forecast by 6 percentage points and that raising the prices of its products had helped the snack-maker to offset rising costs. An analyst with ICBC International, who declined to be named, said the company's gross profit margin may improve this year as the cost of raw materials is set to ease. Want Want, which was established in Taiwan and entered the mainland market in 1992, now generates 90 per cent of its sales from the mainland. Last year, dairy products and beverages - Want Want's biggest-selling products - accounted for 47.3 per cent of the total revenue, while rice crackers and other snacks amounted to 27.7 and 24.5 per cent respectively. 'Although we cannot control the costs of bulk raw materials and labour, the management will continue to adopt last year's cost-saving and profitability improvement measures to ensure the profit of our group is not materially eroded by inflation,' said Tsai Eng-meng, chairman of Want Want, in a filing to the Hong Kong Stock Exchange. Want Want had said in August that it was in the process of setting up a food processing joint venture with Natori and Marubeni Corporation, Reuters reported. It also entered into a technology licence agreement with Morinaga Milk Industry in November with the aim of entering the mainland's chilled products market. Want Want declared a final dividend of 1.36 US cents per share.