Revenue increased by 28.9% to HK$4.7 billion

Net profit surged by 48.9% to HK$330.8 million

Gross margin expanded by 2.1 ppts

Net margin expanded by 1.0 ppt

Financial Highlights:

Key Summaries:

(16 July 2015 – Hong Kong) Vinda International Holdings Limited (“Vinda International” or the “Company”, which together with its subsidiaries, is collectively referred to as the “Group”; stock code: 3331) announced today its interim results for the six months ended 30 June 2015 (the “Period”).

The Group recorded a 28.9% growth year-on-year to HK$4.7 billion in overall revenue. Excluding the effect of the acquisition of the SCA business, the Group recorded a year-on-year organic growth of 18.7% in total revenue which excelled the industry average growth rate. Revenues from the traditional distributors, modern supermarkets and hypermarkets, corporate clients and E-commerce accounted for 48.2%, 30.6%, 11.4% and 9.8% respectively. The core business of Tissue accounted for 96.6%, while the Personal Care businesses accounted for 3.4% in total revenue.

Gross profit increased by 37.9% to HK$1.5 billion. Gross profit margin increased by 2.1 percentage points to 31.6%.

Operating profit grew by 35.4% year-on-year to HK$468.2 million and widened operating profit margin by 0.5 percentage points to 9.9%.

Net profit surged by 48.9% to HK$330.8 million year-on-year. Basic earnings per share for the Period were 33.1 HK cents (first half of 2014: 22.3 HK cents). The Board proposed the payment of an interim dividend of 5.0 HK cents (first half of 2014: 4.0 HK cents) per share for the six months ended 30 June 2015.

Household Paper (“Tissue”) Business

During the Period, the Group used Tempo and Vinda respectively to target the individual professional and the family consumer, while using the away-from-home brand Tork to address the high-end corporate clients. Revenue generated from Tissue business increased by 25.5% to HK$4.58 billion, with sales volume up by 25.0% to 320,348.4 tons. Notably, sales of higher-margin products such as softpack, box tissue, hanky and wet wipe grew significantly by 36.6%, 29.0%, 48.3% and 38.3% respectively.

The Group had 890,000 tons of annual designed paper production capacity as at 30 June 2015.  It is expected to reach 950,000 tons of annual designed paper production capacity by the end of 2015.

Personal Care Business

The Group has had the operating rights over SCA’s various internationally renowned brands for personal care products since the fourth quarter of 2014. It is the intention of Group to step up the sales and earnings in the long run by capitalizing on SCA’s strong R&D and technological capability combined with the extensive distribution capability of Vinda.

The Group will build its own production facilities for incontinence care product so as to meet the future market demand with lower cost and higher efficiency of production. Such facilities are expected to commence production in the second half of next year. The Group has three first-class baby diaper production lines in central China. Leveraging the technical support from SCA, the Group could produce all of its baby brands’ products.

Rapid Expansion of Online Sales and Development of Specialty Channel

During the Period, the Group topped the charts in terms of market share at the major e-commerce platforms. In the future, the Group will tighten its strategic cooperation with e-commerce platform operators so that it can extend the sales coverage and reach new markets. In addition, the Group will not only boost its personal care sales by using the existing sales and distribution network, but also expand the specialty channels such as maternity shops, elderly homes and hospitals.

Prospects

Tissue will remain as the Group’s core business in the coming future. Sales from Tissue is expected to grow steadily while Tissue’s product mix will be optimized to continuously gain higher market share and profitability. The Group will seize every opportunity to grow demand in high quality hygiene products by using its international brands to tap into incontinence care, feminine care and baby care markets in China.

The Group aims to have 20% of total revenue contributing by personal care business in the medium to long term. In view of the “One Belt One Road” initiative advocated by the central government, the Group has also started to study the opportunity for expanding its overseas business.

Mr. Li Chao Wang, Chairman of the Group concluded, “Looking ahead to the second half of 2015, it is expected that the competition in Tissue will continue but will not necessarily intensify. We will allocate more resources to R&D and marketing to enhance the awareness and reputation of personal care brands. We will also strive to further broaden the penetration of sales channels, expand the sales from e-commerce and specialized distribution channels, while to achieve better synergies from the integration with SCA’s businesses.”