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Public company info - Green Future Food Hydrocolloid Marine Science Company Limited , 01084.HK
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Green Future Food Hydrocolloid Marine Science Company Limited, 01084.HK - Company Profile
Chairman CHAN Kam Chung
Share Issued (share) 816,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Food Additives & Flavouring
Corporate Profile Business Summary: The Group is in the business of manufacturing and sales of food manufacturing hydrocolloid products including carrageenan products, agar-agar products, blended products and konjac products in the People’s Republic of China (“PRC”) and overseas. Performance for the year: Revenue amounted to HK$992.9 million, representing a slight decrease of 0.4%, as compared to HK$997.1 million for the year ended 31 December 2018. Gross profit amounted to HK$251.7 million and the gross profit margin was 25.4%, as compared to HK$267.0 million and 26.8%, respectively, for the year ended 31 December 2018. Profit for the year amounted to HK$93.9 million and the net profit margin was 9.5%, as compared to HK$93.8 million and 9.4%, respectively, for the year ended 31 December 2018. Business Review Emerging Market with Numerous Opportunities In 2019, the domestic and global demands for the Group's hydrocolloid products varied in different regions but were stable on the whole. As a result of the economic slowdown in the relevant markets and the depreciation in the exchange rate of Renminbi, the Chinese and European markets saw a decrease of 7.7% and 8.1%, respectively, in sales revenue as compared to that of 2018. In contrast, benefited from the Group's initiative to expand into the Asian markets, there was a remarkable increase in the revenue attributable to the Korean and Indonesian markets, resulting in an increase of 44.7% in revenue in the Asian markets (excluding China) for the year ended 31 December 2019. In 2019, the sales in the PRC and the overseas accounted for 44.2% and 55.8% of the Group's annual sales, respectively (2018: 47.7% and 52.3%), which is in line with the Group's business strategy to gradually increase the proportion of the overseas sales. Product Development and Innovation for Increasing Income We succeeded in expanding the market for quick-dissolve agar-agar products for use in dairy products in 2019 through strengthening the Group's product research and development capability and marketing efforts. The sales revenue of quick-dissolve agar-agar products recorded an increase of 253.7% for the year ended 31 December 2019 as compared to 2018 and quickdissolve agar-agar products became one of the Group's products offering the highest gross profit margin in 2019, driving up the overall gross profit margin of agar-agar products for 2019. The Group's Directors believe that with a stable and growing demand for dairy products, the quickdissolve agar-agar products are of great business value. In addition to the traditional processed foods, the Group has also expanded the use of the Group's products in the application of pet foods this year. It is expected that the market for pet foods in China will have a great development potential in the foreseeable future. Furthermore, konjac gum has become a key ingredient of various health food for its rich soluble dietary fibers, and its development is gaining momentum. With regard to daily necessities, the markets for gel-type air fresheners and beauty products such as face masks were further developed this year. The Group expect that the diversity of end products and applications will be key areas for the Group's future expansion. Complementary Strategies for Product and Market The sales volume and sales revenue of carrageenan and agar-agar products, contributing to approximately 90% of the Group's sales revenue for the year ended 31 December 2019, decreased by 2.4% and increased by 0.4%, respectively, as compared to 2018. The sales volume and sales revenue of konjac products increased by 12.5% and 19.7%, respectively, for the year ended 31 December 2019, as compared to 2018, while the sales volume and sales revenue of blended products decreased at 14.4% and 17.0%, respectively, as compared to 2018, due to the shortterm fall in the revenue of the domestic sales in the PRC market as a result of the Group's sales strategy to balance the product pricing between the domestic market and overseas markets and further expand the Asian markets (excluding China). Despite the extensive challenges to the business environment in 2019, the Group's revenue and aftertax net profit could still remain broadly flat as compared to 2018, which was a good indication of the Group's competitiveness and resilience as an industry leader. Prospects: The Group is prudently optimistic about the prospects in 2020. Currently, the outbreak of COVID-19 and the relevant containment measures to contain the spread of COVID-19 affect both China and the rest of the world, leaving high degree of uncertainty to the global economy. As the Group's the hydrocolloid products are mainly used in the applications of foods and daily necessities, which are daily necessities, the Group's Directors expect the demand will remain stable even with the slowdown of the global economy, which may affect the consumption growth in certain regions. Further, the Group's Directors believe that with the launch of new end products to the market, the prospect of hydrocolloid products is promising. In addition, as the Group's customers are not overly focusing on a particular geographical region, the Group's Directors expect that the economic downturn in any region would not materially affect the Group's business. The Group’s development strategy is to continue to increase the Group's investment in product research and development, optimise the Group's product portfolio and develop new markets. During the first quarter of 2020, the Group established a subsidiary in Shanghai dedicated to the research and development as well as marketing of quick-dissolve agar-agar products, in order to accelerate the expansion of the Group's the market share. Further, the Group has also increased the Group's business promotion efforts in Asian courtiers (excluding China) in 2019, leading to a significant improvement in revenue generation from such markets. In order to accelerate the Group's business development, the Group will put more resources to expand into the Southeast Asian markets which the Group believes have great development potential with its large population.

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