8 Highlights From Vitasoy International Holdings Limited’ Latest Earnings

More than a year ago I did a deep dive into Vitasoy International Holdings Limited (“Vitasoy”) (HKG:0345). As 2020 unfolded, the novel coronavirus pandemic battered its supply chains and markets. Business in Mainland China were significantly disrupted – particularly business in Wuhan and Hubei Province – the epicentre of the pandemic.   

Fast forward to today, Vitasoy has announced its annual results for the financial year (FY) ended 31 March 2021. Here are 8 interesting facts about the group’s latest earnings that investors should know about.

1. Steady earnings due to cost optimisation and receipt of government subsidies

In spite of the Covid-19 disruption, Vitasoy stayed focused on its business fundamentals and saw a steady increase in revenue and earnings in FY2020/ 2021, led by the growth in the Mainland China market.

The Group’s revenue increased by 4% to HK$7,520 million. Profit attributable to equity shareholders of the Company grew by 2% to HK$548 million. The increase in profit was mainly due to cost optimisation and receipt of government subsidies related to retaining staff employment despite imploding revenues in Hong Kong. Gross profit margin sustained by 53%. Excluding government subsidies and in the absence of any employees’ reduction counter-measures, profit attributable to equity shareholders dropped 35%.  

(Source: FY2020 / 2021 earnings presentation)

2. Mainland China Operation –  Started the post Covid-19 recovery with both brands VITASOY and VITA growing

With strong market demand in the second half of FY2020/2021, Vitasoy China returned to a solid growth path to drive the Group’s recovery. 

The market reported an 8% increase in both revenue and operating profit in local currency terms, supported by growth in both the VITASOY and VITA business lines. Excluding Covid-19 related government support, profit from operations fell 4%. Due to RMB appreciation, revenue and profit from operations grew 11% and 10% respectively in HKD terms. 

During the fiscal year, Vitasoy China introduced a new oat milk product – VITASOY VITA Oat to enhance its plant milk position. 

Infrastructure development continued with the commissioning of its manufacturing plant in Dongguan, Guangdong Province, adding production capacity to support continued growth. 

The business in Mainland China is expected to grow in FY2021/2022 with a focus on core offering innovation, complemented by integrated sales and marketing programmes, and strong execution in same stores and geographical footprint expansion. 

3. Hong Kong operation – Sustained leadership and profitability in core categories amidst contracted Vitaland and export businesses due to continued Covid-19 impact

Vitasoy Hong Kong was impacted by successive waves of Covid-19, affecting the on-the-go channel, Vitaland school tuckshop and export business. Hong Kong revenue and profit from operation declined 12% and increased 32% respectively versus the previous year. 

The growth of operating profit was attributed to strategic cost control and receipt of government subsidies related to retaining staff employment despite contracting revenue. Excluding the Covid-19 related government subsidies, and in the absence of any employees’ reduction counter-measures, profit from the Hong Kong operation fell 22%. 

Encouragingly, the supermarket channel and online business registered growth. While there was growth in core plant milk and tea products for the Hong Kong operation, Vitasoy’s leadership position for both categories were sustained. 

In FY2021/2022, Vitasoy will continue disciplined cost improvements whilst leveraging new campaigns on both VITASOY and VITA brands and exciting innovation to restore strong revenue growth.

4. Australia and New Zealand – Strong core business and multi-plant innovation mitigated pandemic’s impact

Revenue in Australia and New Zealand dropped by 1% in local currency as the extended lock-down severely affected the restaurant and coffee channel business. The drop in revenue was also caused by a distortion from shoppers’ stock up which took place in the last month (March 2020) of the prior year. This was evened by strong core business performance and the launch of new items in the Oat and Almond portfolio. Profit from operation dropped 16% in local currency terms, as the drought in previous year still affected part of Vitasoy Australia’s raw material prices, coupled with higher investment to continue to strengthen brand equity.

Revenue and profit from operation grew 5% and dropped 12% respectively in HKD terms due to Australian dollar’s appreciation.

Looking ahead, Vitasoy expects a return to revenue growth, driven by a new campaign to strengthen its brand across plant-based categories and the bounce back of the on premise business.

5. Singapore –  Pandemic impacted the export tofu and import beverage businesses

Revenue from Vitasoy Singapore business was flat in local currency terms as compared to the previous fiscal year. Growth in the local tofu business offset the decline in export tofu and import beverage which were impacted by the pandemic. Profit from operation dropped 39% in local currency terms due to additional staff cost to sustain local production in the context of the pandemic. The lock-down also delayed planned innovation which caused additional material costs. 

In the coming year, Vitasoy Singapore will accelerate domestic tofu business and continue to drive the import beverage portfolio and upon easing of pandemic restrictions, restart its export tofu business.   

6. The Philippines – Build soymilk awareness to prime for market resumption

The Philippines joint venture continued to operate in a very challenging environment. Encouragingly, the local team managed to achieve growth of the multi-serve business which partly offset the decline of single serve due to Covid-19 continuous lockdowns and extended restrictions. 

The local team will continue to focus on driving the VITASOY portfolio towards the home occasion while continuing to prepare relevant programmes for the future growth. 

7. Financial position

Vitasoy’s financial position improved during FY2020/2021 as its cash balances increased from HK$848 million to HK$971 million, while its bank borrowings decreased from HK$241 million to HK$130 million. Overall, the Group gearing ratio improved from 16% to 14% as of 31 March 2021.  

(Source: FY2020 / 2021 earnings presentation)

8. Final dividend of HK$29.0 cents per ordinary share 

The Board of Directors recommended a final dividend of HK$29.0 cents per ordinary share. Together with the interim dividend of HK$3.8 cents per ordinary share, the total dividends for FY2020/2021 will be HK$32.8 cents per ordinary share. This compares favourably against the FY2019/2020 total dividend per ordinary share of HK$32.2 cents per ordinary share.   


The pandemic challenges will continue to impact the Group’s operating environment in the short term, causing not only increasing raw material and logistics costs, but also complexity and volatility. In this context, the Group’s sales outlook is cautiously optimistic. 

Vitasoy’s operations provided resilient and have adapted to operating within this “new normal”. With pandemic restrictions, slowly and gradually easing across its markets, the Group expects to complete the recovery of its business in the sectors which have been most affected, such as the on-the-go and on premise channels, exports across all markets and the Vitaland school tuckshop business which, historically, is a significant contributor to the Hong Kong Operation. 

The Group will continue to improve execution in existing customers and geographical expansion primarily in Mainland China. The global plant-based food and beverage movement is becoming ever more mainstream, and is expected to add additional impetus to the Group’s growth prospects. 

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