Tingyi (Cayman Islands) Holding Corp (康師傅控股), China’s biggest maker of packaged food, said third-quarter profit rose 60 percent on China’s growing demand for cold drinks and instant noodles.
Net income for the three months ended September rose to US$147.4 million, or US$0.0264 a share, from US$91.9 million, or US$0.0165, a year earlier, the Tianjin-based company said in a statement to the Hong Kong stock exchange yesterday.
Sales increased 16 percent to US$1.5 billion.
Tingyi, maker of China’s best-selling instant-noodle brand Master Kong (康師傅), is releasing new products to increase its market share as demand for convenience food grows in the world’s most populous nation.
Lower raw material prices, compared with a year earlier, also improved profitability.
“The company has consistently kept quality standards in production and is unwavering in its focus on the China market,” said Jane Wu (鄔崢), a Hong Kong-based analyst at KGI Securities Co Ltd (凱基證券) who has a “neutral” rating on Tingyi.
“It is also working on boosting economy of scale by replacing old equipment with new production technology,” she said.
Tingyi, which advanced 1.9 percent to HK$18.12 (US$2.34) at the midday trading break in Hong Kong, has doubled in market value this year.
The benchmark Hang Seng Index has gained 59 percent in the same period.
The company aims to boost beverage production by 20 percent beginning in January, chief financial officer Frank Lin (林清棠) told a briefing in Hong Kong.
Beverage products accounted for 58 percent of sales in the third quarter.
Tingyi sells packet noodles under its “Master Kong” label with its “Fumanduo” brand tailored for low-income consumers.
Chinese consumption expanded as the domestic economy improved and demand increased, Tingyi said yesterday.
“The group captured this opportunity and continued to scale new peaks in its turnover,” Tingyi said.
Master Kong noodles have a market share in terms of sales volume of 41 percent, retaining their top position in China, Tingyi said, citing a survey by ACNielsen in September.
Tingyi’s instant noodles sales rose 9.6 percent in the third quarter to US$593.7 million. Palm oil prices in the three months to September, which increased compared with the first half, were “still lower” than the same quarter a year ago, the company said yesterday.
In the third quarter, sales for its beverage business rose 26.2 percent to US$887.7 million. Tingyi had 24.1 percent market share in China for bottled water, in terms of sales volume, the company said, citing a ACNielsen survey in September.
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