FAST NEWS: Shiyue Daotian swings to black on whole grain sales surge

The Latest: Shiyue Daotian Group Co. Ltd. (9676.HK) on Thursday reported a net profit of 126 million yuan ($17.8 million) for the first half of this year, reversing a 24.3 million yuan loss in the same period of 2023.

Looking Up: The company’s revenue rose by 17.7% to 2.62 billion yuan, as sales of its whole grain, bean and other products surged by 152% to 726 million yuan, offsetting a slight drop in revenue from its rice and dry food products.

Take Note: The company’s selling and distribution expenses jumped by 47.9% to 240 million yuan, mainly due to changes in the structure of its sales channels and a significant increase in commission-related expenses from its use of social e-commerce platforms.

Digging Deeper: Founded in 2005, Shiyue Daotian has been partnering with JD.com and Alibaba’s Tmall since 2011 to sell its agricultural products over e-commerce platforms, recording big online sales growth as it reverses the notion that rice is only sold in traditional supermarkets. By the end of the first quarter of 2023, it had partnerships with over 4,000 key opinion leaders and consumers, and its online stores and media accounts had some 28 million followers, according to the prospectus from its IPO last year. The company filed for a Hong Kong listing in March last year and its shares debuted in October.

Market Reaction: Shiyue Daotian’s shares rose on Friday, closing up 1.5% at HK$16.46 by the midday break. The stock now trades 7.2% higher than last year’s IPO price of HK$15.36.

Translation by A. Au

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