Key Takeaways:
China Feihe posted declines in both profits and sales last year, as it is heavily exposed to the country’s falling birth rate
The company, which gets 91% of its revenue from infant milk formula, may remain attractive to investors due to its pledge to pay much of its profits as dividends
By Edith Terry
China Feihe Ltd.’s (6186.HK) 2023 year-end results, announced last week, were dismal enough to leave investors crying over plenty of spilled milk. The infant formula maker’s annual revenue sank 8.3% year-on-year to 19.5 billion yuan ($2.69 billion), and its profit fell by an even larger 33.5% to 3.3 billion yuan. But rather than cry, investors applauded the results with a rise of over 9% in the company’s stock. So, what do they see in this homegrown infant powder star?
One answer is the healthy dividends it is spinning off. It paid an interim dividend amounting to 1.1 billion yuan last September, equal to 30% of profits. And in its latest results announcement, it promised to return another 40% of its profit in a dividend whose amount will be determined and approved at its annual meeting.
Such dividend payments are a popular strategy for attracting investors by consumer stocks like Feihe, which tend to soak up plenty of revenue but whose slower growth stories tend to be less attractive than sexier companies from sectors like tech and new energy.
Dividends aside, Feihe’s latest results offer clues that the company may be working hard to diversify beyond its core infant formula into powdered milk for children and adults, as well as new milk products with better growth potential. And it has 10.5 billion yuan in cash to cushion it through any transition. While its sales of infant milk formula products fell 10.3% to 17.8 billion last year, sales of its “other dairy products” actually rose by 23.4%.
Infant milk formula makes up 91.5% of Feihe’s revenue, with “other” …
Full story available on Benzinga.com
Key Takeaways:
China Feihe posted declines in both profits and sales last year, as it is heavily exposed to the country’s falling birth rate
The company, which gets 91% of its revenue from infant milk formula, may remain attractive to investors due to its pledge to pay much of its profits as dividends
By Edith Terry
China Feihe Ltd.’s (6186.HK) 2023 year-end results, announced last week, were dismal enough to leave investors crying over plenty of spilled milk. The infant formula maker’s annual revenue sank 8.3% year-on-year to 19.5 billion yuan ($2.69 billion), and its profit fell by an even larger 33.5% to 3.3 billion yuan. But rather than cry, investors applauded the results with a rise of over 9% in the company’s stock. So, what do they see in this homegrown infant powder star?
One answer is the healthy dividends it is spinning off. It paid an interim dividend amounting to 1.1 billion yuan last September, equal to 30% of profits. And in its latest results announcement, it promised to return another 40% of its profit in a dividend whose amount will be determined and approved at its annual meeting.
Such dividend payments are a popular strategy for attracting investors by consumer stocks like Feihe, which tend to soak up plenty of revenue but whose slower growth stories tend to be less attractive than sexier companies from sectors like tech and new energy.
Dividends aside, Feihe’s latest results offer clues that the company may be working hard to diversify beyond its core infant formula into powdered milk for children and adults, as well as new milk products with better growth potential. And it has 10.5 billion yuan in cash to cushion it through any transition. While its sales of infant milk formula products fell 10.3% to 17.8 billion last year, sales of its “other dairy products” actually rose by 23.4%.
Infant milk formula makes up 91.5% of Feihe’s revenue, with “other” …
Full story available on Benzinga.com
Key Takeaways:
China Feihe posted declines in both profits and sales last year, as it is heavily exposed to the country’s falling birth rate
The company, which gets 91% of its revenue from infant milk formula, may remain attractive to investors due to its pledge to pay much of its profits as dividends
By Edith Terry
China Feihe Ltd.’s (6186.HK) 2023 year-end results, announced last week, were dismal enough to leave investors crying over plenty of spilled milk. The infant formula maker’s annual revenue sank 8.3% year-on-year to 19.5 billion yuan ($2.69 billion), and its profit fell by an even larger 33.5% to 3.3 billion yuan. But rather than cry, investors applauded the results with a rise of over 9% in the company’s stock. So, what do they see in this homegrown infant powder star?
One answer is the healthy dividends it is spinning off. It paid an interim dividend amounting to 1.1 billion yuan last September, equal to 30% of profits. And in its latest results announcement, it promised to return another 40% of its profit in a dividend whose amount will be determined and approved at its annual meeting.
Such dividend payments are a popular strategy for attracting investors by consumer stocks like Feihe, which tend to soak up plenty of revenue but whose slower growth stories tend to be less attractive than sexier companies from sectors like tech and new energy.
Dividends aside, Feihe’s latest results offer clues that the company may be working hard to diversify beyond its core infant formula into powdered milk for children and adults, as well as new milk products with better growth potential. And it has 10.5 billion yuan in cash to cushion it through any transition. While its sales of infant milk formula products fell 10.3% to 17.8 billion last year, sales of its “other dairy products” actually rose by 23.4%.
Infant milk formula makes up 91.5% of Feihe’s revenue, with “other” …Full story available on Benzinga.com Read MoreAsia, contributors, Markets, Asia, Markets, Benzinga Asia
