Hsu Fu Chi International

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#1
May 7, 2011
Hsu Fu Chi's Q3 profit drops 16.5% to $39m

By Dennis Chan , DEPUTY MONEY EDITOR

SINGAPORE-LISTED Chinese cake and candy maker Hsu Fu Chi International yesterday reported a 16.5 per cent drop in third-quarter net profits to 205.7 million yuan (S$39 million).

Revenue for the three months ended March 31 fell by a marginal 1.2 per cent to 1.51 billion yuan.

This was attributed to a shorter Chinese New Year sales period and a decrease in sales volume following a price hike in the group's products.

Despite the price hike, gross profit margin was 43.4 per cent, which was 10.1 per cent lower than that of the previous corresponding period.

This was due mainly to the increase in raw material prices and labour wages.

Other income rose by 20.8 per cent to 8.8 million yuan, thanks to a research and development grant from the provincial government of Dongguan.

Financial income more than quadrupled to 8.1 million yuan from 1.9 million yuan previously, due mainly to an increase in interest income as a result of higher bank balances.

On the expense side, selling and distribution costs fell by 17.4 per cent to 392.7 million yuan.

This is because transportation expenses and slotting fees had been booked in the previous quarter as Chinese New Year season this year came earlier than usual.

Slotting fees are monetary incentives that suppliers pay to the hypermarkets to obtain extra space to display their merchandise.

General and distribution expenses climbed by 24.4 per cent to 57.6 million yuan as a result of higher salaries.

Earnings per share eased to 25.87 fen from 30.96 fen previously, while net asset value per share climbed to 3.69 yuan from 3.59 yuan as of June 30 last year.

For the nine months to March 31, net profit was 17.6 per cent higher at 675.9 million yuan, while revenue rose 23 per cent to 4.37 billion yuan.

During the period under review, Hsu Fu Chi said the major challenges it had faced were rising raw material prices and labour costs.

The tax incentives for subsidiary Dongguan Hsu Chi - at a preferential income tax rate of 15 per cent - expired at the end of last year.

'The increasing operational costs and higher income tax rate would have an impact on the group's financial performance in 2011, which would result in a decrease in both gross and net profit margins,' the company warned.

The group will continue to enhance its operational efficiency, machine automation, product branding, pricing and marketing strategies to mitigate the impact, it added.

(Not Vested)
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#1
May 7, 2011
Hsu Fu Chi's Q3 profit drops 16.5% to $39m

By Dennis Chan , DEPUTY MONEY EDITOR

SINGAPORE-LISTED Chinese cake and candy maker Hsu Fu Chi International yesterday reported a 16.5 per cent drop in third-quarter net profits to 205.7 million yuan (S$39 million).

Revenue for the three months ended March 31 fell by a marginal 1.2 per cent to 1.51 billion yuan.

This was attributed to a shorter Chinese New Year sales period and a decrease in sales volume following a price hike in the group's products.

Despite the price hike, gross profit margin was 43.4 per cent, which was 10.1 per cent lower than that of the previous corresponding period.

This was due mainly to the increase in raw material prices and labour wages.

Other income rose by 20.8 per cent to 8.8 million yuan, thanks to a research and development grant from the provincial government of Dongguan.

Financial income more than quadrupled to 8.1 million yuan from 1.9 million yuan previously, due mainly to an increase in interest income as a result of higher bank balances.

On the expense side, selling and distribution costs fell by 17.4 per cent to 392.7 million yuan.

This is because transportation expenses and slotting fees had been booked in the previous quarter as Chinese New Year season this year came earlier than usual.

Slotting fees are monetary incentives that suppliers pay to the hypermarkets to obtain extra space to display their merchandise.

General and distribution expenses climbed by 24.4 per cent to 57.6 million yuan as a result of higher salaries.

Earnings per share eased to 25.87 fen from 30.96 fen previously, while net asset value per share climbed to 3.69 yuan from 3.59 yuan as of June 30 last year.

For the nine months to March 31, net profit was 17.6 per cent higher at 675.9 million yuan, while revenue rose 23 per cent to 4.37 billion yuan.

During the period under review, Hsu Fu Chi said the major challenges it had faced were rising raw material prices and labour costs.

The tax incentives for subsidiary Dongguan Hsu Chi - at a preferential income tax rate of 15 per cent - expired at the end of last year.

'The increasing operational costs and higher income tax rate would have an impact on the group's financial performance in 2011, which would result in a decrease in both gross and net profit margins,' the company warned.

The group will continue to enhance its operational efficiency, machine automation, product branding, pricing and marketing strategies to mitigate the impact, it added.

(Not Vested)
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#2
The recent sharp rise in prices of most basic raw materials (e.g. sugar) is hurting Hsu Fu Chi's GP Margin. This impact is across-the-board for most businesses producing and selling F&B products, and especially so for those which rely heavily on basic raw materials as key inputs, and are not in a position to raise selling prices in the short-term due to competition.
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#2
The recent sharp rise in prices of most basic raw materials (e.g. sugar) is hurting Hsu Fu Chi's GP Margin. This impact is across-the-board for most businesses producing and selling F&B products, and especially so for those which rely heavily on basic raw materials as key inputs, and are not in a position to raise selling prices in the short-term due to competition.
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#3
Hsu Fu Chi International Limited (the “Company”) seeks a voluntary suspension of its shares pending announcement(s). This is to avoid abnormal fluctuation over the Company’s shares price and maintain shareholders’ interests.

Most likely privatization ?
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#3
Hsu Fu Chi International Limited (the “Company”) seeks a voluntary suspension of its shares pending announcement(s). This is to avoid abnormal fluctuation over the Company’s shares price and maintain shareholders’ interests.

Most likely privatization ?
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#4
(04-07-2011, 01:55 PM)Nick Wrote: Hsu Fu Chi International Limited (the “Company”) seeks a voluntary suspension of its shares pending announcement(s). This is to avoid abnormal fluctuation over the Company’s shares price and maintain shareholders’ interests.

Most likely privatization ?

Yes, read some news which mentioned that a USA company is interested in buying out Hsu Fu Chi. This is one quiet S-Chip which everyone missed, haha!
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#4
(04-07-2011, 01:55 PM)Nick Wrote: Hsu Fu Chi International Limited (the “Company”) seeks a voluntary suspension of its shares pending announcement(s). This is to avoid abnormal fluctuation over the Company’s shares price and maintain shareholders’ interests.

Most likely privatization ?

Yes, read some news which mentioned that a USA company is interested in buying out Hsu Fu Chi. This is one quiet S-Chip which everyone missed, haha!
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#5
Hsu Fu Chi in Talks With Nestle on Acquisition

By Bloomberg News - Jul 4, 2011 11:16 AM GMT+0800

Full Article: http://www.bloomberg.com/news/2011-07-04...uyers.html
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#5
Hsu Fu Chi in Talks With Nestle on Acquisition

By Bloomberg News - Jul 4, 2011 11:16 AM GMT+0800

Full Article: http://www.bloomberg.com/news/2011-07-04...uyers.html
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Reply
#6
(04-07-2011, 02:11 PM)Nick Wrote: Hsu Fu Chi in Talks With Nestle on Acquisition

By Bloomberg News - Jul 4, 2011 11:16 AM GMT+0800

Full Article: http://www.bloomberg.com/news/2011-07-04...uyers.html

Wow ok.....count this in to the number of privatization offers that I've missed! I think if there was a medal for missing out on GO, I could probably win it. Tongue
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#6
(04-07-2011, 02:11 PM)Nick Wrote: Hsu Fu Chi in Talks With Nestle on Acquisition

By Bloomberg News - Jul 4, 2011 11:16 AM GMT+0800

Full Article: http://www.bloomberg.com/news/2011-07-04...uyers.html

Wow ok.....count this in to the number of privatization offers that I've missed! I think if there was a medal for missing out on GO, I could probably win it. Tongue
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#7
I feel your pain too. Another good S Chip with decent dividend paying record leaves SGX hiaz.
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Reply
#7
I feel your pain too. Another good S Chip with decent dividend paying record leaves SGX hiaz.
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#8
sigh. This was one of the companies i was hoping to see during the next cycle. it's products are really in every chinese supermarket.

even if you didnt invest in this company, you could have benefitted from it by being invested in transpac.
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#8
sigh. This was one of the companies i was hoping to see during the next cycle. it's products are really in every chinese supermarket.

even if you didnt invest in this company, you could have benefitted from it by being invested in transpac.
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#9
Transpac had sold away all the Hsu Fu Chi shares at around $1.5 i think.
They are probably regretting the decision now.

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#9
Transpac had sold away all the Hsu Fu Chi shares at around $1.5 i think.
They are probably regretting the decision now.

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#10
another that donmihaihai got it spot on. so many of his counters privatised
Dividend Investing and More @ InvestmentMoats.com
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#10
another that donmihaihai got it spot on. so many of his counters privatised
Dividend Investing and More @ InvestmentMoats.com
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