Core tip: On March 31, Huabao International (00336.HK) released its 2022 annual report. The data showed that the Group achieved sales revenue of approximately RMB 3.829 billion (2021: approximately RMB 3.883 billion), down year on year
On March 31, Huabao International (00336.HK) released its 2022 annual report, showing that the group achieved sales revenue of approximately RMB 3.829 billion (2021: approximately RMB 3.883 billion), a year-on-year decrease of 1.4%; the gross profit margin was 49.0% (2021: 59.2%), a year-on-year decrease of 10.2 percentage points; the operating loss was approximately RMB 608 million (2021: operating profit of approximately RMB 1.114 billion); the loss attributable to equity holders of the company was approximately RMB 1.055 billion (2021: profit attributable to equity holders of the company of approximately RMB 675 million); basic loss per share was approximately RMB 0.3265 (2021: basic earnings per share of approximately RMB 0.2170).Public information shows that Huabao International Holdings Limited was established in 1996 and listed on the Hong Kong Stock Exchange in 2006 (00336.HK). Its core business includes the research, development, production, sales, and service of flavors (for tobacco, food, and daily use), fragrance raw materials, tobacco raw materials and materials (reconstituted tobacco leaves, expanded tobacco stems, new materials for cigarettes, etc.), and seasoning products.The financial report mentioned that during the reporting period, the group's sales revenue from flavor and food ingredient business was approximately RMB 1.877 billion (2021: approximately RMB 1.927 billion), a year-on-year decrease of 2.6%, accounting for 49.0% of the group's total revenue (2021: 49.6%). The decline in segment revenue was mainly due to reduced demand from downstream customers and changes in product structure. The segment's operating profit was approximately RMB 824 million (2021: approximately RMB 1.104 billion), a year-on-year decrease of 25.4%; the operating profit margin was 43.9% (2021: 57.3%), a year-on-year decrease of 13.4 percentage points. The decline in operating profit margin was mainly due to the increase in the proportion of sales of lower-margin products caused by changes in product structure.Specifically regarding tobacco flavors, the financial report mentioned that the group focuses on the research and development of new tobacco flavor products. The group has developed various heated tobacco flavor products. Testing has shown that these flavor products can stably release aromas in heated tobacco products, enhancing user experience. In terms of food flavors, the rapid product development speed and short production cycles of downstream customers have led the group's R&D and marketing teams to closely track market changes, allowing for quicker adjustments to formulations and the launch of products that meet customer needs. The group also collaborates with customers to develop products, leveraging our industry expertise to enhance the flavor of customer products.Additionally, the financial report revealed that to better develop international business, the group has established the "Asia Pacific Huabao" R&D center in Singapore. This R&D center has hired top talents in R&D, technology, and market analysis to study and analyze beverage, baking, and savory products in the Southeast Asian market. The group believes that Asia will be the market with the most growth potential in the future, and starting from the Southeast Asian market, the group will gradually expand more overseas business, enhance the level of business internationalization, and diversify revenue sources.
