Fruit distributor Chongqing Hongjiu Fruit announced Monday its revenue rose 26.4% year-on-year to 13.43 billion yuan in the first three quarters.

The latest: Fruit distributor Chongqing Hongjiu Fruit Co. Ltd. (6689.HK) announced Monday its revenue rose 26.4% year-on-year to 13.43 billion yuan ($1.84 billion) in the first three quarters of 2023, while its net profit grew at a similar rate for the period.

Looking up: The company’s six core products contributed approximately 6.52 billion yuan in revenue during the period, up 30.6% year-on-year, led by a 126% jump in grape sales.

Take Note: The company generated 26.9 million yuan in net cash inflow from operating activities, reversing a net cash outflow in the same period last year. But the inflow is still relatively small compared to the company’s revenue.

Digging Deeper: Established in 2002, Hongjiu is one of the top three fruit sellers in China, and grew rapidly over the last three years during the Covid pandemic. The company listed in Hong Kong last year, but only raised about HK$500 million ($64 million), far below the rumored target of HK$2.35 billion, due to weak sentiment. Its current market capitalization is about HK$4.6 billion, which is sharply below the $7.39 billion yuan it achieved in its last pre-IPO funding round.

Market Reaction: Hongjiu shares rallied on Thursday, closing up 7.6% to HK$4.81 by the midday break. The stock now trades at the lower end of its 52-week range.

Translation by A. Au

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