Vitasoy: No plans for further price adjustments; repurchase is a long-term direction, not a short-term decision

Vitasoy International (00345.HK) reported a 6.3% year-on-year decline in interim revenue, primarily attributed to the weak market conditions affecting its mainland China business, which faced challenges; during the period, the plant-based milk category in the mainland market recorded a 10% decline, while the tea beverage category grew by 5%. The Group's Chief Financial Officer, Wu Yinhong, stated that last November, the prices of tea beverage products in the mainland were reduced by 10 to 15%; soy milk products did not see a price drop, but the discount rates were adjusted; the Hong Kong market remained unaffected. She indicated that current prices are very competitive, and there are no plans for further price adjustments.

CEO Lu Botao believes that there are still growth opportunities in the mainland beverage market, and the Group will continue to drive sales and expand its sales regions and channels; currently, the brand is concentrated in the southern, eastern, and central regions, with other areas still having penetration potential. Additionally, the Group will continue to promote product innovation to gradually increase the scale of its mainland business.

Regarding the Hong Kong business, Lu Botao stated that although it was affected by short-term factors during the reporting period, such as weak performance in Macau and exports, this core market still maintains stable performance each year. When asked about the competitive situation, Lu Botao acknowledged that there has indeed been market competition over the past three years, with many mainland brands entering Hong Kong, but the Group's market share has still grown, and it is expected that the performance in the second half of the fiscal year will be better than in the first half.

On the product front, Lu Botao mentioned that the proportion of low-sugar and sugar-free products will continue to increase in the future, influenced not only by sustainability but also by changing consumer preferences. The Group previously mentioned in its sustainability report that by 2030, 80% of its product portfolio will consist of low-sugar or sugar-free products. When asked about the current progress, Lu Botao stated that updates would only be available during the annual performance report, as a longer-term performance is needed to reflect progress.

When asked about the impact of Hong Kong residents shopping in the mainland on local retail, the Group's Executive Chairman, Luo Youli, stated that in addition to Hong Kong residents going north, there are also mainland tourists coming south. The brand performs strongly in Hong Kong, and tourists visiting Hong Kong will also see this, which is beneficial for brand influence and helps sales in both the mainland and local markets.

Recently, the chairman of Sun Hung Kai Properties (00083.HK), Huang Zhixiang's brother Huang Zhida, has repeatedly increased his holdings in Vitasoy Group shares. When asked whether the Group's share buyback is related to Huang Zhida's increased holdings, Luo Youli stated that the buyback is a demonstration of the Group's confidence in its long-term value and is not a short-term decision, but rather a long-term direction for the future