Fufeng Group (546) H1 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 was RMB13,368.0 million, down 1.6% year-over-year, mainly due to declines in the Colloid and Others segments offsetting growth elsewhere.

• Profit attributable to shareholders dropped 32.3% to RMB1,041.3 million, reflecting lower gross profit from the colloid and food additives segments.

• Gross profit margin decreased to 17.2% from 21.8% in the prior year period.

• Basic EPS was RMB41.31 cents, down from RMB60.70 cents in 1H 2023.

• Interim dividend of HK16.0 cents per share and special interim dividend of HK2.0 cents per share declared.

Financial highlights

• Revenue: RMB13,368.0 million (down 1.6% year-over-year).

• Gross profit: RMB2,298.1 million (down 22.3% year-over-year).

• Net profit: RMB1,041.3 million (down 32.3% year-over-year).

• Operating profit: RMB1,111.4 million, down from RMB1,732.0 million year-over-year.

• Net finance income increased to RMB116.5 million from RMB25.6 million, mainly due to higher interest income.

Outlook and guidance

• Global economic growth for 2024 projected at 3.2%; China targets 5% GDP growth.

• ASP of MSG and xanthan gum expected to remain stable; threonine and lysine prices to hold at current levels.

• Corn and coal prices anticipated to stay low in the second half of 2024.

• Key risks: weak downstream demand, new peer capacity, and geopolitical risks affecting exports.

• Focus areas: finalizing new MSG and chemical plant trial runs, promoting new MSG capacity, developing overseas sales offices, and accelerating new lysine facility.