Weilong Delicious Global Holdings Ltd (“Weilong” or the “Company”) (Hong Kong stock code: 9985.HK) announced its unaudited interim results for the six months ended 30 June 2023 (the “Reporting Period”).
As the impact of the Covid-19 gradually wanes, the consumption scenarios are constantly improving, and the consumption conditions are constantly getting better. China’s economy is steadily recovering and returning to normal operations. As a leader and pioneer in the spicy snack food industry in China, Weilong is not only dedicated to enhance research and development (“R&D”) capabilities, intensively cultivate existing product categories and expand product portfolio but also actively explored the snacks specialty retailer channel, expanded the nationwide sales and distribution network and deepening development of online channels, through youth-oriented brand marketing to enhance interaction with young consumers and establish closer connection with consumers.
Weilong’s performance was solid during the Reporting Period, recording a revenue of RMB2,327.3 million, representing a year-on-year (YoY) increase of 3.0%, primarily due to (i) the Group making structure adjustments to its main products and upgrading its operations in the Previous Year, initial results in the Reporting Period have been achieved due to these adjustments and upgrades; (ii) a drop in the consumer flow of offline traditional channels and channels of hypermarkets and supermarkets during the Reporting Period and (iii) an increase in the average selling price resulted from the Group’s structural adjustment of main products in the Previous Year, which was partially offset by a decrease in the sales volume of the products. Gross profit increased by 28.4% YoY to RMB1,106.2 million and gross profit margin improved to 47.5% from 38.1% in the same period last year, mainly due to (i) an increase in the average selling price resulted from the Group’s structural adjustment of main products in the Previous Year; (ii) a decrease in the price of raw materials during the Reporting Period; and (iii) the optimization of the Group’s cost management by streamlining production process continuously. Net profit of RMB447.1 million was up 271.4% YoY. Adjusted net profit increased by 17.0% YoY to RMB497.0 million and adjusted net profit margin improved to 21.4% from 18.8% in the same period last year mainly due to the increase in gross profit.
Based on the Group’s surplus and overall financial conditions, the Board has resolved to the distribution of an interim dividend of RMB0.12 (tax inclusive) per share, representing approximately 60% of the net profit of the Group for the Reporting Period. The dividend is expected to be paid on or about October 12, 2023.
During the Reporting Period, on the product side, the Group adhered to the strategy of “multiple categories and large single product”, continued to expand our product portfolio through years of research and development and innovation to respond to changing market conditions and consumer preferences quickly.
In terms of channel, Weilong continued to strengthen the offline sales strategy of “sales support and sales assistance” to further enhance the coverage and the execution quality of POS. With the quick rise of the new channel of snacks specialty retailers across China, the Group actively launched customized products targeting this new channel of snacks specialty retailing in the hope of seizing the development opportunities brought by such new channel more effectively.
On the branding front, the Group continuously strengthens brand building through brand activities centering around young consumers and conducts consumer research and interaction to actively explore improvements of brand awareness and reputation, combined with in-depth online content marketing to enhance user engagement, so as to provide consumers with better product experience.
Mr. Liu Weiping, Chairman of the Board of WEILONG, commented, “In the face of the diversified changes in the sales channels of China’s snack food industry, new channels such as snacks specialty retailers and content e-commerce platforms are continuing to increase in traffic. Weilong will actively embrace the development opportunities brought by new channels with a more proactive and open mindset. At the same time, the Group will continuously strengthen product building and brand building, refine and improve the Group’s product portfolio and the Group’s brand awareness and reputation. The Group will continue to consolidate its manufacturing capabilities and R&D capabilities, enhance organizational capabilities and the construction of digital intelligence to improve its overall operational efficiency and consumer experience. Finally, the Group will stay true to its original aspiration and mission, striving to maximize returns for consumers, clients, shareholders, investors, employees and the society.”
About Weilong Delicious Global Holdings Ltd
WEILONG Delicious Global Holdings Limited (“WEILONG”) is an all-in-one spicy snack products enterprise, leading in the research and development, production, processing, and sales of spicy snack foods in China. With strong growth momentum and a highly influential brand, WEILONG has been committed to transforming the traditional food into a more entertaining, casual, and convenient format that is also affordable. Since pioneering the first spicy snack in 2001 and leading the construction of industry standards to this day. Our goal is to create delicious casual food and enjoyable consumer experiences for our customers. With its outstanding “multiple categories and large single product” strategy and category expansion capabilities, WEILONG has successfully expanded into categories such as vegetable products, bean products, and other products, launching single products such as “Konjac Shuang”, “Fengchi Kelp”, and “78 Degree Celsius Braised Eggs”. WEILONG is a popular snack food brand among young Chinese consumers and has won several marketing awards. In 2023, WEILONG won the “Top Digital Innovation Marketing Award – Content E-commerce Special Award” and “The 14th Tiger Roar Awards – Social Media Marketing (Bronze)”. For more information, please visit https://www.weilongshipin.com/
Topic: Press release summary