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Tianyi Summi reports upsurge in revenue and net profit, and recommends a final dividend distribution of HK$0.015 per share

2017-09-27 00:54
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HONG KONG, Sept. 27, 2017 /PRNewswire/ -- China's leading orange juice manufacturer, Tianyi (Summi) Holdings Limited ("Tianyi Summi" or the "Company", stock code: 00756, together with its subsidiaries, the "Group"), announced today a 4 per cent increase in its revenue to RMB604 million for the year ended 30 June 2017 (the "year under review"). The Group's net profit increased by 7.3 per cent to approximately RMB67,483,000. Earnings per share were RMB5.08 cents. The board of the Company recommended a final dividend distribution of HK$0.015 per share for the financial year 2017.

Low inventory of international fresh orange during the year under review, led to decline in the world's production of frozen concentrate orange juice ("FCOJ") and surge in FCOJ prices. As a result, sales of the Group's FCOJ and related productions increased from that of the previous year and contributed to improvement in the Group's overall revenue. During the year under review, earnings before interest, tax, depreciation and amortization (EBITDA) of the Group amounted to RMB154,793,000, representing a significant year-on-year increase of 18.6 per cent. During the year under review, despite increased finance costs due to higher borrowings, the Group continued to control its other expenses, and managed to lower selling and distribution expenses by 14.7 per cent year-on-year, as well as to trim other operating expenses.

During the year under review, Summi fresh orange juice, FCOJ and its related products and fresh oranges accounted for 22.3 per cent, 57.2 per cent and 20.5 per cent respectively of the Group's revenue.

During the second half year of the year under review, the Group began to fine-tune the sales network of Summi fresh orange juice. While adjusting the sales network nationwide, the Group discontinued certain sales points with unsatisfactory performance, in order to maintain overall operational efficiency. As at the end of the year under review, the Group maintained approximately 5,000 sales points in China and Hong Kong SAR, with no significant increase in number from that of the previous year. As a result, sales of Summi fresh orange juice slightly decreased by 8.9 per cent to RMB135,064,000 due to decline in sales volume, during the year under review.

The sales of the Group's FCOJ and its related products included FCOJ, orange pulp, orange fibre and other related products, which are mainly supplied to domestic and international renowned beverage enterprises to produce fruit juice drinks. During the year under review, major production area of FCOJ worldwide, such as Florida in the USA and Brazil, were affected by the declining crop of local fresh oranges or lower inventory, leading to FCOJ supply shortage in global market. As a result, sales volume and selling prices of the Group's FCOJ improved during the year under review, with its sales amount surged by 7.9 per cent year-on-year to RMB195,563,000.

Mr. Sin Ke, Chairman of Tianyi Summi said, "It is anticipated that the shortage in supply of FCOJ worldwide will continue in the near future. This is expected to have a positive impact on our FCOJ business."

On the other hand, increased demand for fruit juice drinks containing fruit grains in the domestic retail market during the year under review, led to significant increase in both the sales volume and selling price of orange pulp, a major raw material for fruit grains. The sales amount of the Group's orange pulp increased by approximately 20.6 per cent year on year to approximately RMB147,735,000.

The Group operates approximately 146,000 mu (equivalent to approximately 97.3 km2) of orange plantations with orange trees in Kaizhou, Chongqing. During the year under review, the Group's plantations of approximately 70,000 mu entered the trial production phase and harvested a small amount of fresh oranges. However, overall output of the plantations was affected by unstable weather in Chongqing in the previous year. Therefore, output of fresh oranges had not significantly increased during the year under review.

The Group was awarded, in December 2016, a certificate of Sustainable Agriculture Guiding Principles ("SAGP") for the orange plantation operated by the Group. The plantation supplies fresh oranges as raw material of frozen concentrate orange juice for a world leading beverage brand. The accreditation signified that the Group's agricultural practice complies with the stringent requirement for maintaining sustainable supply of healthy agricultural ingredients, in an environmental-friendly manner, to the international beverage giant. The Group is the first orange juice supplier in the world certified for compliance of SAGP stipulated by the beverage giant. The Group believes that such accreditation will enhance the long-term relationship with this major customer.

Tianyi Summi began to launch smart vending machines, as a major innovative sales channel for Summi fresh orange juice in late June 2017. As of September 2017, Tianyi Summi has installed about 400 smart vending machines in Beijing, Shanghai, Qingdao, Hangzhou, Wuhan and a number of cities in Fujian Province. They are mainly installed in hospitals and appropriate public areas such as railway and subway stations, which exhibit huge demand for health drinks and high passerby traffic. The Group will gradually expand the network of its smart vending machines, in accordance to their operations in different cities and consumption pattern of the local markets, either through self-operation or third party cooperation.

Tianyi Summi's smart vending machines are connected with the Group's operations center via the Internet. According to the operational data of each vending machine, Tianyi Summi can obtain real-time sales information of the entire fleet of vending machines, and achieve highly efficient logistics and warehousing management based on these data. Tianyi Summi can access to the real-time operational data of each smart vending machine. Consumers can also purchase products from the vending machines and settle through online payment. Not only can the smart vending machines be connected to the new sales model of the Company's e-commerce platform via IoT, they can also enable the Company to analyse big data by gathering customers' information. Basing on the analysis, the Company can make effective allocation of sales and marketing resources.

About Tianyi Summi

Tianyi Summi is principally engaged in the production and sale of frozen concentrate orange juice (FCOJ) and related products (such as orange pulp and orange fibre) and fresh oranges. It also produces Not From Concentrate (NFC) fresh orange juice under its Summi brand. The Group launched Summi fresh orange juice for sale in March 2015. This product is 100% freshly squeezed orange juice without any reconstituted concentration processing, thereby effectively retaining the nutrition value and original flavor of orange juice. The product is being sold in major cities in China such as Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Chengdu and Nanjing as well as Hong Kong.

With a vertically integrated business model, the Group runs four highly efficient FCOJ production plants and a new NFC production plant which are strategically located in China's three major citrus growing areas, namely Chongqing, Hunan and Fujian. The Group is one of the few fully-integrated orange juice manufacturers operating its own upstream orange plantations. The Group operates approximately 97.34 square km of orange plantation with matured fruit trees in Chongqing, China.

– End –

Tianyi (Summi) Holdings Limited

(Stock code: 00756)

Consolidated Statement of Profit Or Loss 

For the year ended 30 June 2017


   For the year ended 30 June 


2017


2016


RMB'000


RMB'000

Revenue

604,286


581,273

Cost of sales

(391,907)


(340,958)





Gross profit

212,379


240,315

Gain from changes in fair value of biological assets less costs to sell

67,908


31,857

Other revenue

19,163


7,065

Selling and distribution expenses

(84,053)


(98,543)

Administrative expenses

(97,129)


(83,108)

Other operating expenses

(8,955)


(12,712)





Profit from operations

109,313


84,874

Finance costs

(42,268)


(22,570)





Profit before tax

67,045


62,304

Income tax credit

438


566





Profit for the year attributable to owners of the Company

67,483


62,870





Earnings per share




    ─   Basic (RMB cents)

5.08


4.69





    ─   Diluted (RMB cents)

5.08


4.69

 

Source: Tianyi (Summi) Holdings Ltd

Related stocks: HongKong:0756

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