Vitasoy International Holdings issued a warning on Friday that its
net profit for the 12 months ending March 31 is expected to fall 25 to 35
percent year-on-year - as the novel coronavirus pandemic has battered its
supply chains and markets.
Operations in some factories on the mainland have been suspended or have yet to fully resume, putting a further strain on supply chains
The beverage maker said in a filling to the Hong Kong Stock
Exchange that their route-to-market planning and supply chains across Chinese
mainland had been significantly disrupted - particularly business in Wuhan and
Hubei Province – the epicentre of the pandemic.
Various measures were enforced in many provinces and
municipalities on the mainland to curb the outbreak of pandemic, such as
lockdowns. Operations in some factories on the mainland have been suspended or
have yet to fully resume, putting a further strain on supply chains.
"As a large proportion of our mainland business comes from
general trade channels, closure of small retail stores across the country has
also impacted our business," the group said.
Vitasoy owns a plant in Wuhan which was opened in 2016 with a
capital investment of about 500 million yuan (HK$546 million). The plant mainly
produces beverages in the categories of soy milk and other plant-based drinks
as well as tea. Some canned lemon tea and canned chrysanthemum tea produced in
Wuhan are on sale in Hong Kong.
On the Hong Kong side, market sentiment has already weakened due
to social unrest in the second half of last year. It has deteriorated further
since the onset of the coronavirus the group said.
It added take-home sales were weaker as shoppers’ attention was
diverted to the purchasing of other daily necessities. Sales in convenience
stores have also been affected, as consumers chose to avoid crowded
areas. Moreover, sales at school tuckshops have been halted as the SAR
government imposed school closures in November and during the pandemic.
Secretary for Education Kevin Yeung Yun-hung announced at the end
of February that the city’s kindergartens, primary and secondary schools would
be closed until April 20 at the earliest due to the coronavirus outbreak.
However, Chief Executive Carrie Lam Cheng Yuet-ngor has said there is now
little to no possibility that schools will fully reopen on April 20.
The group posted a net profit of HK$696 million for 12 months
ending March 31 2019, an increase of 19 percent year-on-year.
