Promotional strategies increases brand acceptance, which allows Hsu Fu Chi to pass on costs increases to customers. Photo by Kathy Zhang / Financial PR

CHINA’S NO.1 candy maker Hsu Fu Chi ended its financial year to 30 Jun 2008 with year-on-year sales growth of 25% to Rmb 3.4 billion, exceeding the company’s internal growth target of 20% or more.

Costs of raw materials such as edible oil, eggs, flour and powdered milk rose during the year.

Despite this, customer loyalty to the candy maker’s brand name and new marketing strategies enabled the company to expand gross margins 2.1 percentage points to 41.3%.
Tax expenses increased 86% due to the expiry of a subsidiary’s tax incentive window period.  Consolidated effective tax rate increased by 5 percentage points year-on-year to reach 23% for FY08.

Net earnings grew 35% to Rmb 344.8 million.

The company is proposing a tax-exempt dividend of Rmb 0.15 per share (3 Singapore cents), which amounts to a dividend yield of 3% based on the stock’s closing price of S$1.05 before the results were announced.

Other than a good set of financial results, stock price of the leading PRC candy maker has not done too badly either.

Three in four S-chips listed in the past decade are trading below their IPO issue price, but Hsu Fu Chi is an exception.

Close to two years after listing on 1 Dec 2006, the stock last closed at 24% above its IPO price of 85 cents, compared to 30% underwater for the others.

Funds that bought into the stock at one time or another include Arisaig Partners, Martin Currie, UOB Asset Management and Fidelity Investments.

Related stories:

5 Nov 2007HSU FU CHI ramps up capacity to grow top line 20% or more
22 Oct 2007HSU FU CHI candy scores with advertising and promo

You may also be interested in:

You have no rights to post comments

Counter NameLastChange
AEM Holdings3.3600.030
Avi-Tech Electronics0.255-
Best World1.640-
Broadway Ind0.076-0.002
China Sunsine0.400-0.010
Delfi Limited1.260-
Food Empire1.1200.030
Fortress Minerals0.325-0.010
Geo Energy Res0.250-0.005
GSS Energy0.033-0.001
Hong Leong Finance2.460-0.030
Hongkong Land (USD)3.4600.040
ISDN Holdings0.375-
IX Biopharma0.045-
Jiutian Chemical0.032-
KSH Holdings0.320-
Leader Env0.072-0.001
Medtecs Intl0.139-0.005
Nordic Group0.415-
Oxley Holdings0.106-0.001
REX International0.183-0.007
Sinostar PEC0.140-
Southern Alliance Mining0.690-
Straco Corp.0.4550.010
Sunpower Group0.295-
The Trendlines0.095-
Totm Technologies0.048-0.001
Uni-Asia Group0.950-
Wilmar Intl3.7400.040
Yangzijiang Shipbldg1.660-0.050

We have 472 guests and no members online

rss_2 NextInsight - Latest News