Hengan International Group Company Limited

irasia.com – Hengan International Group Company Limited

Hengan International Group Company Limited

Hengan International announces its 2021 annual results
Profit attributable to shareholders of RMB 3.27 billion
Final dividend at 0.7 RMB per share
Return to shareholders reaches 89.4%

Focus on the three main professions
Continued premiumization of products and strengthening of brand strength

(March 22, 2022- Hong Kong) – Hengan International Group Company Limited (“Hengan International” or the “Company”, stock code SEHK: 1044, together with its subsidiaries, the “Group”) today announces its annual results for the fiscal year ended December 31, 2021.

The pandemic accelerated the development of new consumption patterns, domestic e-commerce market penetration and new retail channels continued to increase. However, the fragmentation of sales channels has dealt a severe blow to sales through traditional channels. Along with the intensification of competition in the industry during the year, various brands and new retail channel operators in the industry actively took market share through sales promotion. As a result, for the year ended December 31, 2021, Group revenue fell by 7.1% to approximately RMB 20,790,144,000 (2020: RMB 22,374,001,000) from Last year.

The Group has actively seized development opportunities related to new consumption patterns, vigorously developed its e-commerce activity and established itself in new distribution markets. During the year, the Group further increased its share of e-commerce sales (including Retail Integrated (“零售通”) and New Channel (“新通路”)) to approximately 23.1% (2020: 19.1%), and made good progress in developing new retail channels (including online to offline (O2O) platform, community group purchasing, etc.), with sales accounting for more than 10% of global sales. In addition, the Group grasped domestic consumer demand for consumption upgrade, and continued to develop high-end products and optimize the product mix. Among them, the “Space 7” high-end sanitary napkin series has been well received by the market, and the “Cloudy Soft Skin” (雲感柔膚) high-end tissue paper series has recorded strong momentum of sales during the year, resulting in a significant increase in its revenue contribution, and sales of high-end disposable diapers “Q•MO” also recorded robust growth.

During the year under review, tissue paper companies intensified their promotional efforts, which further intensified competition in the industry. Despite the negative impact of soaring wood pulp prices in the second half of the year, in order to remain competitive in the market, the Group did not pass cost pressure on to consumers , which hampered the profits of the Group’s tissue papers. business. In 2021, the Group’s overall gross margin fell by approximately 17.8% to approximately RMB 7,772,318,000 (2020: RMB 9,455,855,000), while the overall gross profit margin fell to 37.4% (2020: 42.3%). Given that the price of wood pulp is still at a high level, as well as the relatively low cost of the Group’s wood pulp in the first half of 2021, gross margin is expected to remain under pressure in 2022.

During the year, operating profit fell 28.9% to RMB 4,543,591,000 (2020: RMB 6,392,388,000) as the high cost of wood pulp weighed on the profitability of the tissue paper activity. In addition, the pressure on the Group’s earnings led to a reduction in the Group’s government subsidies calculated by taxes paid (nearly RMB 128 million) during the year, coupled with the relatively stable exchange rate of the renminbi against to the US dollar during the year, resulted in a significant decrease in foreign exchange gains compared to last year. Profit attributable to shareholders of the Company was approximately 3,273,601,000 RMB (2020: 4,594,815,000 RMB), representing a decrease of approximately 28.8% year-on-year. Basic earnings per share was approximately RMB 2,786 (2020: RMB 3,864).

The Board of Directors declared a final dividend of RMB 0.70 per share for the year ended December 31, 2021 (2020: RMB 1.30), as well as an interim dividend of RMB 1.00 per share ( first half of 2020: RMB 1.20) paid, the total dividend for the year was RMB 1.70 per share (2020: RMB 2.50 per share), amounting to RMB 1,988,606,000 ( 2020: 2,958,424,000 RMB). With the repurchase by the Group of a total of 24.22 million shares (2020: 3.4 million shares) for a total amount of approximately RMB 937.0 million (2020: RMB 154.0 million) during the year, the Group returned a total of approximately 2 RMB. 93 billion to shareholders during the year, representing a Company profit attributable to shareholders of approximately 89.4% (2020: 67.7%), which was calculated on the basis of the total amounts of the proposed dividends and repurchase of shares as a percentage of the profit attributable to shareholders of the Company.

Commenting on the group’s annual results, Mr. Sze Man Bok, Chairman of Hengan International, said: “During the year under review, the situation of the coronavirus epidemic has been unstable, but the Chinese economy has recovered. steadily improving, the rising level of national income has become a driving growth in the consumer market, and the inelastic demand for personal and household hygiene products has remained strong. However, the negative impact of rising food prices wood pulp was fully reflected in the second half, coupled with increased market competition and fragmented sales channels, In response to the difficult operating environment, the Group adhered to a rational pricing strategy, strengthened brand strength, promoted the strategy of high-end products, vigorously expanded the e-commerce business and expanded to new retail markets, actively seize the business opportunities offered by the consolidation of the domestic tissue paper industry and new retail, and successfully increased its market share in the second half of the year, further consolidating its industry leadership. »

Sanitary napkin
China’s market for feminine care products is huge, ranking first in the world. However, the market is highly saturated and competition is fierce. During the year, many domestic and foreign brands have adopted very aggressive promotion strategies in an attempt to capture the market share of medium-high-end cities and young people’s consumption. In response to intensified competition, Hengan adhered to a stable and rational pricing strategy to maintain its brand image, and expanded its sanitary napkin business with product upgrades and high-end products to consolidate its market leadership in the mid- to high-end segment. Building on the dynamic and high-quality image of the “Space 7” Group’s high-end product, it has been well received by consumers, thus boosting the sales of the entire sanitary napkin business.

The pandemic has spawned new consumption patterns and accelerated the fragmentation of sales channels. E-commerce platforms and other emerging retail channels (including O2O platform and community group shopping) are booming. To align with new consumer trends, the Group actively expanded emerging channels to increase sales and market share of the sanitary napkin business. While developing new distribution channels during the year, the Group inevitably adopted favorable measures, which put pressure on sales of sanitary napkins in traditional channels in the short term. However, the Group believes that the overall revenue of the sanitary napkin business will be significantly improved in the long term through the successful reform of sales channels, and the market share will be further increased.

During the year, as sales channels became more fragmented and competitors adopted aggressive pricing strategies to capture market share, sales of the Group’s sanitary napkin business declined by approximately 8.1% to approximately RMB6,116,531,000 (2020: RMB6,654,711,000) in 2021, representing nearly 29.4% (2020: 29.7%). Despite the competitive pressure of the market, the Group remained committed to a rational and stable pricing strategy, and the gross margin of the sanitary napkin business remained broadly stable at around 70.5%.

The group’s sanitary napkin brand, 七度空間, has always been a hot selling product in mainland China and has long been a market leader in terms of sales volume and market share in the domestic market. Launched in 2020, the premium product “Space 7” which catered to the mature white-collar market continued to see positive sales development during the year. The beloved “Space 7” has continued to help the Group steadily expand the high-end market and gradually increase the proportion of high-end products. The Group’s “Espace 7” has recruited young female artists with a positive image as brand ambassadors, thus infusing femininity and vitality into the brand. With the brand new theme of “seven degrees of great power captured in a pure girl’s heart” (大國七度,存淨少女心), the brand ambassador, including actress Liu Haocun, further rejuvenated the brand. and attracted young consumers. The Group believes that the sales of “Space 7” will continue to grow steadily in the future and will become a major business growth pole, helping the Group to expand its market share of sanitary napkins and gradually increase the proportion of high-end products. range. In addition, the Group will continue to actively develop new retail channels and increase the proportion of sales of new retail channels; the Group will also develop exclusive products for new distribution channels and will adopt a strategy of stable prices, in order to support the Group’s long-term development and consolidate its leading position in the market.

As for other feminine care products, the Group will continue to actively research and develop other feminine care products beyond sanitary napkins, steadily develop the feminine care industry, seize growth opportunities brought by the upgrading of consumption and actively explore opportunities to introduce the Group’s sanitary napkin products overseas. markets.

For more information, please visit https://doc.irasia.com/listco/hk/hengan/annual/2021/respress.pdf.

Source: Hengan International Group Company Limited

© Copyright 1996-2022 irasia.com Ltd. All rights reserved.

DISCLAIMER: irasia.com Ltd does not warrant the accuracy or completeness of any information provided on this website. Under no circumstances can irasia.com Ltd be held liable for damages resulting from the use of the information provided on this site.

TRADEMARK AND COPYRIGHT: All intellectual property rights subsisting in the content of this website belong to irasia.com Ltd or have been legally licensed to irasia.com Ltd for use on this website. All rights under applicable laws are reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited.

TERMS OF USE: Please read the Terms of Use governing the use of our website.

Comments are closed.