Tsit Wing Recorded Revenue of HK$1,071.2 Million for FY2018 Profit Attributable to Owners of the Parent for the Year Increased by 64.4%

Strengthen leading position in the B2B coffee and tea products market; Seeks deepen market penetration of the Mainland China market

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Highlights

• Revenue reached HK$1,071.2 million, representing an increase of 12.2% as
  compared with last year
•  Gross profit amounted to HK$333.1 million, representing an increase of
  15.0% as compared with last year
• Profit attributable to owners of the parent for the year reached HK$75.8 million, representing an increase of 64.4%
  as compared with last year
• Adjusted
  profit attributable to owners of the parent* increased by 17.4% to HK$90.0
  million
• Continues to
  capture the growth in the B2B coffee and tea products market in Hong Kong and
  Mainland China
• Plans to
  strengthen frozen meat and frozen processed food products business and expand
  product offerings
• Seeks deepen
  market penetration of the Mainland China market

 

Financial
Highlights

	Year ended 31 December
HK$’000	2018	2017	Change
Revenue	1,071,232	954,610	+12.2%
??Beverage Solutions	808,734	711,349	+13.7%
??Food Products	262,498	243,261	+7.9%
Gross profit	333,128	289,614	+15.0%
Profit before tax	97,680	64,173	+52.2%
Profit for the year	77,480	48,374	+60.2%
Adjusted profit attributable to owners of the parent*	89,980	76,657	+17.4%
Basic earnings per shares (HK cents)	10.71	7.46	+43.6%

 

*Excluding a number of nonrecurring
income, costs and charges and certain of other non-cash charges

 

HONG KONG, CHINA - Media OutReach - 5 March 2019 – Tsit Wing International Holdings Limited
(“Tsit Wing”, together with its subsidiaries, the “Group”; stock code: 2119),
an integrated B2B coffee and black tea solutions provider, announced its annual
result. For the year ended 31 December 2018 (the “Reporting Period”), Tsit Wing
recorded a total revenue of HK$1,071.2 million (2017: HK$954.6 million),
representing an increase of 12.2% which was primarily due to the increase in
revenue derived from the beverage solutions business, and to a lesser extent,
the growth in revenue derived from the food products business. Gross profit
increased to HK$333.1 million (2017: HK$289.6 million), representing an
increase of 15.0%.

 

If a number of nonrecurring income, costs and charges
and certain of other non-cash charges was excluded, adjusted profit
attributable to owners of the parent reached HK$90.0 million (2017: HK$76.7
million), representing an increase of 17.4%.

 

The Board has proposed the payment of a final dividend of HK5.78
cents per ordinary share in respect of the year ended 31 December 2018 (2017:
HK1.62 cents per ordinary share).

 

Business Review

The Group is a leading integrated B2B
coffee and black tea solutions provider in Hong Kong, Macau and Mainland China
providing one-stop coffee and tea solutions to commercial customers. The Group
also expanded the business scope and commenced frozen meat and frozen processed
food business in Hong Kong and Mainland China.

 

Beverage solutions

During the
Reporting Period, revenue from the beverage solutions segment increased to
HK$808.7 million (2017: HK$711.3 million), representing an increase of 13.7%. The
revenue growth in beverage solutions segment was primarily because of the
increase in revenue derived from tea and instant beverage mix products in
Mainland China. Gross profit increased by 16.6% to HK$308.1 million (2017:
264.3 million), mainly in line with the increment in revenue. Gross profit margin
increased to 38.1% (2017: 37.2%), primarily because of the relatively higher
gross profit margin generated from tea and instant beverage mix products.

 

Food products

During the
Reporting Period, revenue from the food products segment increased to HK$262.5
million (2017: HK$243.3 million), representing an increase of 7.9%. The revenue
growth in food products segment was primarily because of the increase in (i)
the sales of frozen meat products as a result of pricing strategy of the Group;
and (ii) the sales of frozen processed food products as a result of the
expansion of such business in Hong Kong.

 

Revenue by geographic locations

During the Reporting Period, revenue generated in Hong Kong increased by 6.0% to
HK$739.2 million (2017: HK$697.4 million), primarily because of increase in
sales of coffee, tea and milk product as a result of growth in customers’
demand. Revenue generated in Mainland China increased by 31.4% to HK$314.0
million (2017: HK$238.9 million), mainly because of the increase in revenue derived
from instant beverage mix products in Mainland China. Revenue generated in
Macau increased by 6.7% to HK$11.9 million (2017: HK$11.2 million), primarily
because of increase in sales to a new customer.

Business Prospect

As a leading integrated B2B coffee and black tea
solutions provider in Hong Kong, Macau and Mainland China, the Group will endeavour
to take more marketing initiatives to capture the growth in the B2B coffee and tea
products market in Hong Kong and Mainland China, in order to strengthen its
leading position in the market. Also, the Group seeks deepen its market
penetration, particularly focusing on the Mainland China market which is
expected to experience considerable growth, to maintain a high growth rate.

 

The Group will further strengthen its ability to provide food and
beverage products solutions to its customers by exploring potential businesses
of other strategic arrangements with entities which have the product portfolios
demanded by customers and distribution network to expand the Group’s
distribution network.

 

The Group also strengthen its frozen meat and frozen processed food
products business and expand its product offerings by entering into a strategic
cooperation agreement with NH Foods for the sale of frozen, fresh, precooked processed
meat and seafood products and a memorandum of understanding with F&N to explore
business and product development opportunities for the supply, distribution,
cobranded promotion and co-development of beverage products and/or beverage
solutions in July 2017 and April 2018, respectively.

 

Leveraging
on the Group’s experience in providing frozen meat and frozen processed food,
the Group aims to provide tailor-made frozen meat and processed food products
to satisfy the needs of its well-established and diverse customer base in Hong
Kong, Macau and Mainland China and enhance its product portfolio. Furthermore,
the Group will continue to take on more strategic alliance initiatives and
explore business development opportunities with various business partners for
the supply, distribution, co-branded promotion and co-development of beverage
products and/or beverage solutions. It is believed that building on the Group’s
leading market position and well-established distribution network could fully
utilize the distribution channels and optimize efficiency.

About Tsit Wing International Holdings Limited

Tsit
Wing is a leading integrated B2B coffee and black tea solutions provider in
Hong Kong, Macau and the PRC with 86-year heritage. In 2017, coffee sold by the
Group can be made into most 337.7 million cups of coffee per year; tea sold can
be made into most 403.2 million cups of milk tea per year. Tsit Wing commenced
its frozen meat business in Hong Kong and the PRC from 2013.

 

According
to the Frost & Sullivan Report, Tsit Wing is the largest B2B coffee and
black tea solutions provider in Hong Kong in 2016 with 24.5% of the market
share in terms of B2B revenue.