YITASOY INT'L (00345.HK) Executive Chairman Luo Youli stated at the earnings meeting that the mainland market is facing intense price competition, with the price of mainland lemon tea products reduced by 10% to 15% as of the end of March this year; however, current prices have stabilized, forecasting that there will be no further price reductions in the mainland market, and believing that the company's products possess considerable competitiveness, with the market having reached a saturation level. The Hong Kong market has no intention to adjust prices.
In facing mainland companies like NONGFU SPRING (09633.HK) entering Hong Kong, CEO Lu Botao indicated that in the past year and a half, more quality mainland brands with economies of scale have entered the market, but the company's position in Hong Kong remains solid. Although pricing may be higher, the company maintains competitiveness through annual promotions and various package strategies. Lu Botao also pointed out that the environment in the mainland in the first five months of this year is more challenging than last year, yet competition has not further eroded prices.
Luo Youli stated that in facing increasing challenges from the external environment and a slowdown in growth across various product categories, the new year will focus on expanding market share of core product types such as plant-based milk and ready-to-drink tea, to maintain the business scale and profitability of each operating unit, while maintaining price competitiveness in a deflationary environment; the mainland is a market highly valued by the group. As for overseas markets, efforts will continue to drive revenue growth in Australia and Southeast Asia, with losses in both markets narrowing over the last fiscal year, and it is believed that this fiscal year will continue to improve.
Regarding capital expenditures, VITASOY's Chief Financial Officer Wu Yinhong remarked that over the past decade, capital expenditures were mostly focused on building factories. With large-scale plants already completed, it is expected that there will not be significant investments in the short term, but the long-term direction will be for growth. Lu Botao added that capital expenditures this fiscal year may be slightly higher than last fiscal year.
Additionally, Huang Zhixiang, chairman of Sun Hung Kai Properties (00083.HK), has a brother Huang Zhida who has been increasing his shareholding in VITASOY through Yeo Hiap Seng since last October. Luo Youli responded that why Yeo Hiap Seng buys company stocks and future intentions, 'This really needs to be asked him directly,' describing that the person only explained that buying VITASOY stocks is a 'long-term investment project.'
VITASOY launched its first share buyback since going public in March this year. Luo Youli explained that the buyback helps optimize the company's capital structure and enhance shareholder returns, and is also in line with the company's long-term strategy and the interests of all shareholders.
