China's Tingyi Q3 profit jumps, but margin pressure remains

Uni-President China Holdings

13/11/2017 05:53

HONG KONG, Nov 13 (Reuters) - Tingyi (Cayman Islands) 
Holding Corp  0322.HK , a Chinese partner of Starbucks  SBUX.O  
and PepsiCo  PEP.N , on Monday reported a 30 percent jump in 
quarterly profit but warned of margin pressure partly due to 
rising raw material costs. 
    Tingyi, owner of the Master Kong brand, said its 
third-quarter profit rose to 1.24 billion yuan ($186.6 million) 
from a restated 952.6 million yuan a year earlier, and 266.7 
million yuan in the second quarter. 
    Revenue rose 8.5 percent to 19.69 billion yuan during the 
September quarter. Gross profit margin dropped 0.94 percentage 
point to 32.50 pct year-on-year. 
    "The group's gross profit will remain under pressure in the 
short term," Chairman Wei Ing-Chou said in an exchange filing. 
    The company is facing pressure from China's changing 
economic development mode, rising raw material costs, industrial 
upgrade and fast-changing consumer demand, Wei said. 
    For the first nine months, the company's profit rose 37.9 
percent to 1.94 billion yuan, while revenue rose 5.9 percent to 
48.25 billion yuan. 
    Last week, smaller rival Uni-President China  0220.HK  
posted a 24 percent rise in 9-month profit.  urn:newsml:reuters.com:*:nFWN1NE0LS  
    Many niche domestic snack food brands have expanded their 
pool of millennial customers through interactive online and 
mobile campaigns that place a big emphasis on quality 
ingredients and production methods, which have helped them to 
outpace traditional leaders such as Tingyi.  urn:newsml:reuters.com:*:nL3N1NG434 
    Shares of Tingyi rose 1.9 percent after the results, 
outpacing a 0.3 percent gain in the benchmark index  .HSI . 
 ($1 = 6.6456 Chinese yuan) 
 
 (Reporting by Donny Kwok; Editing by Gopakumar Warrier) 
 ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters 
Messaging: donny.kwok.reuters.com@reuters.net)) 
 
Keywords: TINGYI RESULTS/