not vested
Gain paper-thin for Hengan
Tissue paper maker Hengan International Group (1044) said net profit for the six months to June rose 10.8 percent to HK$1.97 billion from a year back.
But the figure was still much lower than expected, said deputy chairman and chief executive Hui Lin- chit.
"The weak economic environment and overcapacity in the industry raised competition, leading to unsatisfactory results," Hui said.
Hengan has lost its competitive edge in two main sales channels, namely grocery stores and supermarkets, in the past two years amid changes in economic environment and business model, he said.
Revenue increased 3.3 percent to HK$12.5 billion. Diluted earnings per share surged 11.2 percent to 160 HK cents, while the interim dividend jumped 11.8 percent to 0.95 HK cents.
Revenue from tissue paper, sanitary napkins and disposable diapers made up 46.6 percent, 29.6 percent and 12.8 percent, respectively, of the total revenue.
Hui expects bigger growth in the second-half sales and said the industry still has potential. "Yuan depreciation has increased our cost, as 40 percent of our raw materials are imported," he said.
Hengan shares fell 2.64 percent to HK$75.75 yesterday.
Source: The Standard HK