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Ausnutria reports growing revenue amid fiercer competition and stricter laws

By Cheryl Marie Tay+

18-May-2017

Despite stricter regulations, Ausnutria has recorded positive Q1 2017 results.
Despite stricter regulations, Ausnutria has recorded positive Q1 2017 results.

Hong Kong-listed infant nutrition company Ausnutria's total revenues have grown by almost one-third to RMB751.3 million during the first quarter of 2017.

This represents an increase of 30.3% (RMB174.8 million) from the previous quarter’s RMB576.5 million revenue, a significant improvement in the face of fierce market competition following a series of new infant formula laws by the China Food and Drug Administration.

The company’s gross profit rose 24% (RMB58.9 million) to RMB304.4 million, while its profit attributable to its equity holders grew 22.5% (RMB11.9 million) to RMB65 million.

The first quarter performance comes on the back of record full-year profits for 2016.

Ausnutria attributed its ongoing improvement in financial performance primarily to “the continuous increase in sales of the group’s own-branded infant formula products, which was mainly driven by the continues stable increase in demand for infant formula in the PRC”.

Other factors that led to the company’s greater revenue were “the increasing recognition of the high quality standards of infant formula manufactured by the group, the clear brand positioning implemented by the group, and the continuous extension of the sales network and the improvements of services provided to customers”.

Swift expansion

Despite the raised barriers to entry resulting from the new infant formula laws introduced by the China Food and Drug Administration last year, Ausnutria has managed continued success with a clear strategy to adapt,  said the firm.

Its swift expansion in the nutritional product market has seen the company collaborate with Westland, New Zealand’s second largest dairy cooperative, to set up a new manufacturing plant in Rolleston in order to strengthen its reputation as a trusted international source of milk.

Group chairman Yan Weibin has said that Ausnutria’s strategy of international expansion, acquisition and joint ventures are all part of its “Golden Decade” plan, which kicked off last year.

Yan said the group has been “building a global infant formula supply chain” and has established its “overseas nutritional business operations”. At the same time, its products have “gained increasing recognition by the marketing channels and consumers, driven by a rapidly developing market network and enhancing consumer services”.

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