Consumers are getting cost-conscious, says Vitasoy

Vitasoy International (0345) saw its net profit rise by 14.7 percent year-on-year to HK$163 million for six months ending September and declared an interim dividend of 1.4 HK cents per share.

The news came as May Lo, the daughter of executive chairman Winston Lo Yau-lai, was appointed as the deputy chairman of the board.

Revenue during the period, however, declined 7 percent to HK$3.39 billion from a year ago due to a relatively high base last year, the food and beverage firm said.

Operating profit sank 19 percent to HK$171 million from a year earlier, while the gross profit margin rose 2.8 percentage points to 50.5 percent.

If the currency impacts and government subsidies received in the previous corresponding period are excluded, its interim net profit would have jumped 99 percent.

The operating profit in China, which is the group's main profit driver, grew 44 percent in local currency despite a 6 percent fall in revenue.

Vitasoy said that mainland consumers are now becoming more price-sensitive, believing that product pricing is growing at a slower pace than in the past. The firm added that it has no intention to hike prices in the second half of its fiscal year despite higher raw material costs after raising prices in October last year.

It believes that consumers' price sensitivity is only temporary and it has confidence in the medium- to long-term potential of the mainland market.

Shares of Vitasoy dropped 0.7 percent after the release of its financial results.