Vinda International (3331.HK) Revenue growth in 2Q slows down, 1H profit margins still under pressure August 14, 2023 213

PSR Recommendation: SELL Status: Downgraded
Target Price: HKD10.78

Vinda is a leading hygiene company in Asia, with core business segments including tissue,
incontinence care, feminine care, baby care and professional hygiene solution under key
brands Vinda, Tempo, Tork, TENA, Dr. P, Libresse, Libero and Drypers.
Revenue growth in 2Q slows down, 1H profit margins still under pressure
In 1HFY2023, total revenue of Vinda amounted to HK$10,070 million, representing an
increase of 10.1% organically and of 4.0% (presented in Hong Kong Dollar). 1Q and 2Q
revenues were HK$4,969 million and HK$5,101 million, a year-on-year increase of 15.5% and
5.5% respectively. 1H Net profit declined by 81.1% to HK$121 million. The net profit margin
narrowed by 5.4 ppts to 1.2%. Basic EPS was 10.0 HK cents (1HFY2022: 53.0 HK cents), and
an interim dividend of 10.0 HK cents (1HFY2022: 10.0 HK cents) per share.
Despite the gradual reduction of the pulp prices since the end of 2022, costs in the first half
of the year were still impacted by the inventories with relatively high price, and on gross
margin, which decreased by 6.9 ppts year-on-year to 25.1%. Gross profit was down by 18.5%
to HK$2,527 million. EBITDA fell by 42.3% to HK$818 million while EBITDA margin was
narrowed by 6.5 ppts to 8.1%. Total foreign exchange loss was HK$0.3 million (H1 2022:
HK$22.4 million loss), of which HK$5.4 million loss came from operating activities (H1 2022:
HK$26.2 million loss), and HK$5.1 million gain was due to financing activities (H1 2022:
HK$3.8 million gain).

About the author

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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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