<Meeting Takeaways> Vinda International (3331 HK) 1Q22 results saw net profit down 37.8%, slightly below expectations
- Vinda reported 1Q22 revenue of HKD4,566, increased by 2.2% y-o-y
- 1Q22 gross profit scored 12.9% decrease to HK$1,512 m, with a GP margin of 33.1%, 5.8ppts lower than 1Q22’s 38.9% amid higher raw material costs
- Net profit declined by 12.6% to HK$1,638m while net profit margin dipped by 2.6 ppts from the previous year to 8.8%
What’s New
- Vinda reported 1Q22 revenue of HKD4,566, increased by 2.2% y-o-y. Tissue segment accounted for HK$3,671m, representing 80% of the Group’s total revenue (1Q21: 82%), while personal care segment accounted for HK$895m and represented 20% of Group’s total revenue
- Premium product portfolio scored double digit growth in 1Q22, and contributed around 35% of Group’s revenue and 35% of China tissue revenue
- In terms of sales channels: traditional channels, key accounts (e.g., supermarkets and hypermarkets), B2B corporate customers and e-commerce platforms accounted for 28%, 24%, 11% and 37% revenue, respectively. In Mainland China market, e-commerce channel remain strong with 45% revenue contribution to total domestic revenue (1Q21: 44%), the company will continue to invest to further strengthen its leading positions in e-commerce
- 1Q22 gross profit scored 12.9% decrease to HK$1,512m, with a GP margin of 33.1%, 5.8ppts lower than 1Q22’s 38.9% amid higher raw material costs. Vinda will further take actions to enhance the GP margin, including continuous price increases, further raising sales from high-margin products, continuous improvement of operational efficiency
- Operating profit scored around 36.5% decreases to HK$446m, with an operating margin of 9.8% (1Q21: 15.7%). EBITDA margin dropped 5.5ppts to 17.1% in 1Q22
- Net profit declined by 12.6% to HK$1,638m while net profit margin dipped by 2.6 ppts from the previous year to 8.8%
- While 1Q22 was slower than expected, Vinda stays cautiously optimistic and would take actions to protect the profitability and ensure the full-year targets of double-digit growth in the Mainland China market and mid to high single-digit growth in overseas markets in the top-line.
- We currently have a BUY rating on the counter with TP of HK$25.53