Robust quarterly profit at China’s largest producer suggests instant noodles are back in flavour

Shares in Tingyi Holding, China’s largest producer of instant noodles and drinks, were trading at a six-week high on Tuesday, after the company posted a better-than-expected first quarter late on Monday, on the back of robust sales of instant noodle products.

Its shares jumped by about 9 per cent to an intraday high of HK$18.16 in Hong Kong, after the company reported a 64.26 per cent jump in its net profit to 712 million yuan (US$111 million) during the first three months of the year.

Tingyi, which posted a net profit of 434 million yuan during the first quarter last year, benefited from a 8.6 per cent jump in sales revenue from instant noodle products, the Hong Kong-listed company said in a filing on Monday. The sector recorded robust sales growth in the first quarter, and the company said the industry was showing signs of recovery after declining sales between 2013 and last year.

“China’s instant noodle industry is showing an optimistic trend, with positive overall growth in 2017,” said Tingyi, which also produces and distributes drinks, baked goods and soft drinks under its household brand name, Master Kong.

A simple recipe involving the addition of boiling water to flavoured sauces, dehydrated meats and vegetables and noodles, instant noodles were once an ultra convenient food favoured by millions of China’s urban and rural residents.

However, with the emergence of a more health-conscious middle class, instant noodles fell out of favour, with sales volumes dropping from 46.2 billion packets in 2013 to 38.5 billion in 2016 in Hong Kong and mainland China, about 17 per cent drop, according to the World Instant Noodles Association.