Vinda International (03331) Focus on Premiumization, implement pricing initiatives to mitigate costs increases August 26, 2022 71

PSR Recommendation: NEUTRAL Status: Initiation
Target Price: HKD21

Focus on premiumization, implement pricing initiatives to mitigate costs increases
For 1H2022, total revenue of Vinda International increased by 6.6% (growth at constant
exchange rates:6.9%) to HK$9,680mn. Overall revenue in 1Q2022/2Q2022 was HK$4,566mn
(+2.2%YoY) and HK$5,114mn (+10.8%YoY) respectively. Net profit declined by 34.1% to
HK$638mn. Net profit for 1Q2022/2Q2022 was HK$344mn (-37.8%YoY) and HK$294mn(-
29.1%YoY) respectively. The net profit margin narrowed by 4.0ppts to 6.6%. Basic EPS was
53.0 HK cents (1H2021: 80.6 HK cents), with interim dividend of 10.0 HK cents per share for
the Period.
In terms of business segment, the tissue segment accounted for HK$7,963mn of revenue, an
increase of 6.1% YoY or 5.9% at constant exchange rates, representing 82% of the total
revenue (1H2021: 83%). Focus on premiumization strategy has contributed to an increased
share of premium portfolio. This effort to drive higher category margins helped to soften the
impact of rising raw material costs and promotional pressures. However, gross margin of the
tissue segment was still dropped to 31.6% (1H2021: 37.8%). Revenue from the personal care
business increased by 9.0% to HK$1,717mn in 1H2022, which was a 11.7% increase at
constant exchange rates and represented 18% of the total revenue (1H2021: 17%). Gross
margin of the personal care segment was 34.1% (1H2021: 35.3%).

About the author

Profile photo of Eric Li

Eric Li
Analyst
Research

李浩然先生(Eric Li) 高級分析師 現任現為輝立証券持牌高級分析師,曾任職股票基金、家族辦公室及證券公司等,擁有多年的證券研究部門從業及投資經驗,並先後於香港最暢銷的財經媒體撰寫投資專欄。畢業於香港理工大學電子計算系。 Eric is currently a licensed research analyst at Phillip Securities. Prior to joining Phillip Securities, he has years of equity research and investment experiences in asset management company, family office and securities company. Meanwhile, he has written investment columns in Hong Kong`s best-selling financial media for years. He holds Bachelor of Arts in Computing from The Hong Kong Polytechnic University.

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