Sino Grandness

Sino Grandness: Very strong set of record results at the high end of estimates. 4Q12 rev at Rmb 405.7m, +42.3% yoy and net profit at Rmb 64.8m, +184.9% yoy. Result brings FY12 rev to Rmb 1.64b, +61% and net profit to Rmb 289.1m, +88.3^. Gross margins improved further at 38.7% vs 34.1%. In FY12, the Grp recorded higher sales across the board for all product segments. In particular, sales of beverage segment which comprised Garden Fresh juices and domestic canned products segment which comprised Grandness canned fruits surged the most. Beverage segment sales surged 117.4% to RMB873.2m in FY12, while sales of domestic canned products jumped 326.7% to RMB111.1m in FY12. Domestic demand for Grp’s own-branded products grew significantly in FY12 largely due to growing consumer acceptance and continued expansion of its distribution network within the PRC market. Despite uncertainties in the western markets, sales of overseas canned products which included asparagus, long beans and mushrooms continued to grow steadily in FY12 as the Group’s major customers are operators of discount stores in Europe. In FY12, all key product categories for export markets continued to report positive growth, with sales of overseas canned products segment rising 10.8% to RMB655.9m. Going forward, grp is optimistic abt its outlook. Note that despite economic uncertainties faced by the western countries, the PRC economy will be able to sustain a steady growth under the national policy of stimulating internal demand. The rising disposal income per capita and increasing awareness of health promoting products in the PRC are expected to offer tremendous growth opportunities for the F&N indusry. To reward shareholders for their unwavering support and to encourage greater trading interest in the Co’s shares, the Co has proposed a bonus issue on the basis of 1 bonus share for every 2 held by shareholders.