Natural Food International Announces 2018 Annual Results

Financial Highlights

HONG KONG, CHINA – Media OutReach – 29 March 2019 – Natural Food International Holding Limited (“Natural Food International”, the “Company”, together with its subsidiaries, the “Group”; stock code: 1837.HK), a well-recognised natural health food company in China, is pleased to announce its annual results for the year ended 31 December 2018 (“the year under review”) today. The Group’s revenue for the year under review amounted to approximately RMB1,818.1 million (2017: RMB1,576.1 million), representing an increase of 15.4%. The Board has recommended the payment of a final dividend of RMB 0.02 per ordinary share.

The year of 2018 was a crucial year to the business development of the Group. The Group successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited on 12 December 2018. Meanwhile, the Company continued to expand its business and resulted in a comprehensive solid growth in the results.

During the year under review, revenue from online channels increased significantly by 64.0% to RMB339.4 million, while Revenue from offline channels increased steadily by 8.0% to RMB1,478.7million.

Business Review

Rapid increase in product iterations, remarkable contribution from new products

During the year under review, leveraging its strong R & D capabilities and market leading position, the Group has launched 42 popular natural healthy food products, that cater to specific needs of different consumer groups, such as pregnant women, the elderly and teenagers. The rapid increase in product iterations has led to an increase in the proportion of new product revenue contribution. In 2018, revenue of new products contributed 19.7%, 27.9% and 31.6% to revenue by different sales channels, namely, offline channels, E-commerce platforms and WeChat member store, respectively. Meanwhile, the number of registered members of the Group has increased to 20.5 million. Furthermore, to ensure scientific product ingredient ratio and keep the nutritional balance, the Group jointly launched “Wugu Mofang Grain Nutrition Research Centre” ( ????????????) with Chinese Nutrition Society ( ??????) in 2018 to develop reliable natural health food.

Continuously improved Market Penetration, stable sales growth from all channels

The Group’s sales channels are highly integrated to jointly create the New Retail model and complement different channels’ advantages. Regarding the offline channels, in 2018, the Group operated 3,895 concessionary counters in supermarkets in 461 cities across China. During the year under review, the Group strengthened and upgraded channel strategic cooperation with key customers, as well as newly opened 851 concessionary counters, which increased the offline market penetration. In addition, the Group conducted store management reform by gradually implementing the internal partner mechanism, and to revitalized the vitality of offline business operations.

Online channel performance is remarkable. Revenue from e-commerce platforms, such as Tmall, JD.com, and Vipshop.com, increased significantly by 66.4% to RMB239.2 million; Revenue WeChat member stores also increased significantly by 58.4% to RMB100.2 million.

International standardized safe production and supply chain

In 2018, the Group acquired the FSSC22000 Food Safety Certification System, which demonstrates that their quality control meets international best standards. The Company sources high-quality ingredients globally to ensure product quality, and guarantees safe production and high quality standards through complete production facilities and optimized production processes, while also reduces production time.

The company currently owns two production and processing bases with a utilization rate of approximately 90%. To meet the increasing demand of natural food in China, in March 2018, the Group commenced construction of the first phase of its new manufacturing facility in Nansha County, Guangzhou, China for a manufacturing facility for various kinds of products. The new production facility has a total gross floor of approximately 60,000 square metres. After the completion of the new manufacturing facility, the Group’s estimated production capacity will increase to 40,000 tons per year.

Looking ahead, Mrs.  GUI Changqing, Chairlady and Executive Director of Natural Food International Holding Limited, said, “The Listing represents a significant milestone in the development of the Group. Becoming a listed company strengthens our capital base and enhances our corporate image and brand recognition. Benefiting from the growing purchasing power and rising health awareness of Chinese consumers, we remain full of confidence about our future. The Group will continue to maintain and strengthen its leading market position and create more values for our shareholders.”