Vinda profit up 9.3pc
Vinda International, the largest Chinese producer of household paper products, reported a full-year net profit of HK$593.5 million, up 9.3 per cent over a year ago.
As of 10:20am, the firm’s share price had shot up 5.6 per cent to HK$12.68.
Group turnover rose by 17.5 per cent to HK$7.9 billion, the company reported to the stock exchange. Vinda’s core business of household tissue paper accounted for 98.6 per cent while personal care categories of incontinence care, feminine care and baby care made up 1.4 per cent.
Despite the profit jump, the management highlighted a softening growth rate.
“The market for fast-moving consumer goods remained weak and the growth rate in the household paper market decelerated somewhat,” it stated.
“As China enters a ‘new normal’ growth mode … slowing GDP growth will probably drag on personal income growth, which has a very high historical correlation with retail sales growth,” a January 15 BNP Paribas report by consumer analyst Charlie Chen said.
Established in 1985 and listed on Hong Kong Stock Exchange in 2007, the company produces well-known household brands including Vinda and Tempo. It began diversifying into personal care two years ago.
At the end of last year, the group’s aggregate annual household paper production capacity reached 890,000 tonne. In order to keep up with growing demand, Vinda is adding annual production capacity of 60,000 tonnes in Shandong and 30,000 tonnes in Sichuan, scheduled to become operational in the fourth quarter and bringing the total capacity to 980,000 tons by the year-end.
“The group is also evaluating new areas in southern and central China for further production capacity expansion in the future,” the announcement said.
The board proposed a final dividend 12 HK cents per share.
