DBS: Vinda International – Buy Target Price HK$25.53

<Results First Take> Vinda International (3331.HK) 1H22 results saw net profit down 34.1%, below expectations

• Revenue increased by 6.6% y-o-y to HK$9,680m
• Given the high raw material prices and increasing marketing expenses, the gross profit and net profit saw an 8.7% and 34.1% decline, respectively, with a GP margin of 32% and a net profit margin of 6.6%
• An interim dividend of HK0.1 per share was declared (1H21: HK$0.1)

What’s New

• Revenue increased by 6.6% y-o-y to HK$9,680m, of which HK$7,963m was from its Tissue segment and HK$1,717m was from the Personal Care segment
• Tissue segment, accounting for 82% of total revenue, saw an increase of 6.1% y-o-y and a GP margin of 31.6% (1H21: 37.8%)
• Personal Care segment, accounting for 18% of total revenue, up by 11.7% y-o-y and a slight GP margin decrease to 34.1% (1H21: 35.3%)
• In particular, Mainland China’s revenue increased by 8.0%
• Traditional channels, key accounts, B2B, and e-commerce accounted for 26%, 23%, 10%, and 41%, respectively, of total revenue. As the dominant consumption channel, e-commerce business increased by 14.3% y-o-y. 
• Gross profit was down by 8.7% to HK$3,100m, with a GP margin of 32% (1H21: 37.4%)
• EBITDA fell by 22.4% y-o-y to HK$1,418m while EBITDA margin was narrowed by 5.5ppts to 14.6% (1H21: 20.1%)
• Net profit declined by 34.1% to HK$638m, with a net profit margin of 6.6% (1H21: 10.6%)
• An interim dividend of HK0.1 per share was declared (1H21: HK$0.1)
• We will review our TP and rating after results briefing at 10am today