DaChan Food (Asia) Limited (DaChan Food) (Stock Code.: 3,999.HK), one of the large chicken meat suppliers and feeds producers in China, announced 2009 annual results on March 12, 2010.
Though faced with challenges in business environment and affected by the downturn in demand in China’s chicken meat market and the drop of average price due to the excessive supply, yet DaChan Food performed very stable in the year of 2009. The operating income in 2009 was merely decreased by 4% to 1,242 million dollars, mainly thanks to that DaChan Food keeps enjoying good returns from its sales of feeds to external clients and the processed food products attributable to the improvement of product portfolio and widening of distribution channels.
The processed food products have stood out in DaChan Food’s good returns. Thanks to the nice performances on the optimization of product portfolio, diversity of sales channels and brand business, the operating income from processed food products has accounted for a new high percentage of the whole operating income, surging to 7.2%. Meanwhile, the gross profit of processed food products business in 2009 rose 4 times more than that in 2008. Since 2009, the Company has begun to grasp the opportunity brought by its strong brand “Sisters’ Kitchen”, successfully increased the added value of DaChan Food brand and promoted the business performance with the brand of “Sisters’ Kitchen” that is oriented to terminal consumer market and the “transparent source” food safety traceability system of the products sold under the brand of “Sisters’ Kitchen”. Since 2009, “Sisters’ Kitchen”-branded products have been sold in large supermarkets in Beijing, Shanghai and Tianjin, including Tesco, Carrefour, Wal-Mart and so on. Besides, DaChan Food has opened 4 “Sisters’ Kitchen” roast chicken stores in Beijing.
In 2009, chicken meat products and sales of feeds were still the largest income sources of DaChan Food, respectively accounting for 47.*% and 45.0% of the total revenue. Mr. Mark Han Jia-Hwan, the Chairman of the Board of DaChan Food, commented that impacted by the increase of cost of raw materials and drop of average price in the chicken meat business, DaChan Food did not embrace an ideal business environment; however, thanks to the diversified distribution channels, optimization of product portfolio and stable operating platform, DaChan Food kept its position as the leading supplier of quality meat products and continued to supply quality meat products to many famous international enterprises, including KFC, McDonald’s, Dicos and other major clients.
In 2010, DaChan Food will focus on the promotion of its production efficiency and utilization of raw materials, start to raise the proportion of highly priced processed food products in product portfolio and increase the sales of chicken meat products to major fast food suppliers so as to further increase the sales volume.
As for the business to sell feeds to external clients, DaChan Food estimates that in 2010, the sales of feeds will go further with a stable growth. The Company will keep on developing and opening up the sales channels of large pig farms so as to gain share of markets and raise the yields. Meanwhile, DaChan Food will set up a new research and development center for the purpose of benefiting the development and launch of new products and meeting the market demand.
As for the business of processed food products, DaChan Food will mainly expand its market in mainland China and prepare to open “Sisters’ Kitchen” roast chicken stores in more first-tier cities besides maintaining all current distribution channels so as to expand its business quickly. As for the export market, DaChan Food will make great effort to develop new products for its currently existing clients and further expand the markets of food chain restaurants, supermarkets and convenient stores in Japan, Singapore Hong Kong.
With continuous increase of the level of national income and the stimulating economic approaches to expand local demand by the State, it is estimated that there will be more prospects in China’s chicken meat market. DaChan Food has been fully prepared to take advantage of the industrial development opportunity to further boost its own development.
