FAST NEWS: Yan Palace profit tumbles in first half of the year
The Latest: Xiamen Yan Palace Bird’s Nest Industry Co. Ltd. (1497.HK), operator of China’s largest bird’s nest products brand, warned on Tuesday that its net profit for the first half of the year fell between 40% and 50% year-on-year to between 50 million yuan ($6.9 million) and 60 million yuan.
Looking Up: The company forecast its revenue for the period rose 10% to 15% to 1.05 billion yuan to 1.09 billion yuan, mainly due to gains for its online channels, which are bringing a younger customer base and continued growth momentum.
Take Note: The profit decline owed largely to higher costs from the construction and launch of a new green intelligent factory during the period, as well as slower-than-expected growth for its offline channels due to increasing consumer caution.
Digging Deeper: Yan Palace is China’s largest maker of bird’s nest products, which are often consumed as a form of health supplement, with 14% of the market. It applied to list as early as 2011, but shelved the plan after reports of excessive nitrite in some of its products. A second try in 2021 also failed before the company applied in Hong Kong again last year and finally passed its listing hearing in November. The IPO raised about HK$260 million ($33.3 million), with the shares debuting in December.
Market Reaction: Yan Palace shares fell slightly on Wednesday, closing down 0.4% at HK$11.16 by the midday break. The stock now trades 15.1% higher than its IPO price of HK$9.70.
Translation by A. Au
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