Vitasoy (345.HK, HOLD) 1H21 results in-line with profit warning

What’s new? 

  • Vitasoy released 1H21 results in-line with earlier profit warning  
  • Net earnings declined 95% to HK$33m, in view of a plunge in China sales (-29% y-o-y), while most markets reported growth y-o-y 
  • Gross profit margin contracted 7ppts to 48%, while EBITDA margin contracted 17ppts to 9%.
  • Our last rating was a HOLD with TP at HK$20.5 
  • We will host a Group Call with Vitasoy’s management tomorrow (26/11) at 2-3pm. Do kindly let us know if your clients are interested to attend. 

Interim results in-line with profit warning.  Vitasoy (345.HK) issued their interim results in-line with earlier profit warning. Profit declined 95% y-o-y to HK$33m in 1H21 in view of a plunge in China sales (-29% y-o-y; -39% y-o-y in local currency) due to one-off incident, and resurgence in COVID-19 cases.  Apart from that, most markets including HK (+3%), Aus & NZ (+27%; +17% in local currency), and Singapore (+3%) reported growth y-o-y. Overall revenue declined 18% y-o-y. 

Margin contraction resulted from sales deleveraging.  Gross profit margin contracted 7ppt to 48% attributable to lower sales volume, higher trade promotional expenses, reduction of government subsidies.  EBITDA margin contracted 17ppt to 9%. 

Financial position remains intact. As of Sept’21, Vitasoy stood at net cash position at HK$81m. (Mar’21: HK$453m) 


Products have been gradually reshelved since end-Sept in China. While China sales declined substantially due to products being off-shelf during peak season, sales are expected to improve as products are reshelved by end-Sept, with advertising gradually reactivated on a province by province basis.  The Company had initiated a number of in-store activation to take advantage of school starting, mid-autumn festival, and enhanced corporate participation in key fairs. The Company aims to strengthen its advertising activities to restore growth ahead.  Besides this, Vitasoy has launched new brand VITAOAT oat milk, and VITA Sparkling Lemon Tea. 

Our last rating was a HOLD, with TP at HK$20.5. We will host a post-results call tomorrow at 2-3pm.