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Celine Sun

Shares of Want Want China, the mainland's top snack food and dairy products maker, jumped as much as 7 per cent yesterday after it reported net profit grew by nearly a quarter last year.
Lower costs for key raw materials, product price increases and a better sales mix were the main reasons for the company's better-than-expected net profit last year, which rose to US$687.3 million from US$553.8 million in 2012.
Total revenue grew 13.7 per cent to US$3.8 billion, and its gross profit margin improved by 2 percentage points to 41.5 per cent.
Its shares peaked at HK$11.62 yesterday before closing at HK$11.36, up 4.6 per cent. The benchmark Hang Seng Index rose by 0.02 per cent.
Want Want chairman Tsai Eng-meng said in a filing that the company saw "exciting opportunities" ahead because it would launch new products with high gross margins this year in all three of its key product segments: rice crackers; dairy products and beverages; and snack foods.
With a market value of HK$144 billion, Want Want mainly competes with Taiwanese food maker Tingyi Cayman Islands, Shanghai-based Uni-President China and global rivals like Nestle.
It said rice crackers contributed US$909.9 million of total revenue last year, up 12 per cent year on year, mainly thanks to a longer sales period leading up to the Lunar New Year holidays.
The prices of sugar and palm oil, key ingredients of rice crackers, fell last year, as did the cost of packaging materials, helping to offset an increase in the cost of labour.
Dairy products and beverages, the largest revenue contributor, generated around US$2 billion last year.
The growth of flavoured milk products was estimated at 17.7 per cent, slightly below management expectations, mainly due to a shortage of supplies of domestic milk powder on the mainland that was experienced in the second half of the year.
Revenue from snack foods posted robust growth of 8.4 per cent to US$899.8 million last year.
The company said it planned to increase capital expenditure by two-thirds to US$458 million this year. Around two-thirds of the money will be spent on buying land and building factories and warehouses to help expand capacity in dairy products and drinks.
Want Want declared a final dividend of 2.27 US cents per share.


Want Want China profit soars on back of lower raw material costs

With a market value of HK$144 billion, Want Want mainly competes with Taiwanese food maker Tingyi Cayman Islands, Shanghai-based Uni-President China and global rivals like Nestle. Photo: Screenshot via the company's homepage.

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China Business