Tingyi (Cayman Islands) Holding Corp (康師傅控股), China’s biggest maker of packaged food, said first-half profit increased 41 percent on higher demand for noodles and bottled drinks.
Net income in the six months to June 30 rose to US$179.4 million, or US$0.321 a share, from US$127.6 million, or US$0.228, a year earlier, the Tianjin-based company said in a statement to Hong Kong’s stock exchange yesterday. Sales increased 22 percent to US$2.5 billion.
Tingyi is the parent company of Taiwanese-owned Ting Hsin International Group (頂新集團), which operates the biggest instant noodle maker in China and runs Wei Chuan Foods Corp (味全食品) in Taiwan.
Rising incomes and economic growth in China are increasing demand for bottled drinks and packaged foods. Tingyi sells mid-priced noodles under its Master Kong label and caters to the lower-income market with its Fumanduo brand.
“Tingyi is a stable company with good branding and has a dominant market share position,” Jane Wu (鄔崢), a Hong Kong based analyst at KGI Securities Co (凱基證券), said before the earnings announcement.
“Tingyi’s raw material costs are also lower comparatively from a year ago and that helps its margins,” Wu said.
Tingyi shares fell 1.7 percent to HK$14.64 (US$1.89) in Hong Kong at the noon break before the earnings announcement.
The stock has climbed 63 percent this year, outperforming the 41 percent gain in the benchmark Hang Seng Index.
Instant noodle sales gained 9.4 percent to US$1.07 billion in the first half and beverage sales rose 37.8 percent to US$1.3 billion, Tingyi said in the statement.
Prices of major raw materials, including palm oil and plastics, “have sharply decreased” from the second quarter last year, the company said, adding it expected the food industry to continue to have stable growth.
Tingyi has a market share by sales volume in China of 41.2 percent for instant noodles and 51 percent for ready-to-drink tea, retaining its top positions for the two products, the company said, citing a survey by ACNielsen in June.
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