Dynasty Fine Wines Revenue for 2023 1H Increases by 27% to HKD$128.2 Million

Aug 29, 2023 23:20 JST

Source: Dynasty Fine Wines Group Limited

Middle-End Wine Products See Sales Recovery
Construction of Ningxia Tianxia Winery Kicks off in 2H 2023 with Annual Output of 5,000 Tonnes

HONG KONG, Aug 29, 2023 - (ACN Newswire) - Dynasty Fine Wines Group Limited ("Dynasty" or the "Group") (Stock Code: 00828), a premier grape winemaker in China, today announced its unaudited interim results for the six months ended 30 June 2023.

During the period, the sales, especially in the middle-end wine products, were recovered, as a result of the normalization of consumption scenes and the resumption of consumer sentiment in Mainland China after the dismantlement of pandemic control measures at the end of last year. Therefore, in the first half of 2023, the Group's revenue increased by 27% to HK$128.2 million, compared to the same period last year, whereas profit attributable to owners of the Company remained at HK$10.7 million. Gross profit margin decreased to 37% from 40% in the first half of 2022, as material costs and delivery charges increased during the period.

Benefiting from the resumption of consumption scenario such as banquets and gatherings nationwide, sales of red wine products grew well over the period, reaching the sales level of white wine products. Both red and white wine products served as the Group's major revenue contributors, each accounting for approximately 48% of the Group's revenue for the period. Gross margin of red wine products and white wine products were 31% and 45% respectively (2022 1H: 35% and 44% respectively).

The Group produces a wide range of more than 100 wine products under the "Dynasty" brand. It has been actively pursuing innovation, creating the most competitive products, and embracing the "5+4+N" product strategy. The Group's "5" key series of products comprise the air dry series, seven-year reserve series, merlot series, classic series and best-selling series, which cover fully the price range of mainstream markets, whereas the "4" advantageous product categories include dry red wines, dry white wines, brandy and sparkling wines, which enlarge vertical market shares for the Group. Furthermore, the Group boasts the development of "N" kinds of customized products to meet the diversified needs of Chinese consumers.

With China chic on the rise, the Group has launched the "China Chic" series, a series of new high-end products, to further strengthen the recognition of the Dynasty brand and attract mainstream consumer groups fancying China-made products and China chic. The flagship product of this series is the "Dynasty Chinese Zodiac Commemorative Dry Red Wine for the Gui Mao Year of Rabbit," which integrates high quality with Chinese zodiac culture, resonating with Chinese consumers' cultural confidence. Additionally, to satisfy the needs of customer groups with different consumption habits, the Group has launched the Dynasty NIANHUA series, priced between RMB100 and RMB500. Furthermore, with leading and well-proven technologies it has developed, the Group carried out a comprehensive upgrade of production techniques and packaging design of its Golden Dynasty products.

In addition, the Group sold chateau wines imported from France and other foreign-branded wines in China through the Group's existing distribution network. In that way, the Group introduced classic "old world" and "new world" varietals to cater to the consumer group preferring the taste of foreign premium wines.

The Group's overall business potential has been enhanced through online platforms. On one hand, the e-commerce team of the Group comprehensively operated online stores itself on traditional e-commerce platforms, such as JD.com, Tmall and Pinduoduo for product sales. On the other hand, the Group made comprehensive innovation on its brand, product categories, business systems, procedures and models via new retail platforms, including East Buy, RED, Kuai and TikTok. These efforts facilitated the Group's autonomous brand communications so that it could enhance effective market penetration of the Group's products in the young consumer group. Meanwhile, the e-commerce team also actively cultivated e-commerce live broadcasting talents to expand its sales channels further and establish a new customer base. The Group continues putting resources into the improvement of the online sales channels and optimisation of the online stores' interface. During the period, the e-commerce sales grew significantly and reached the level of the whole year of 2022.

Production of quality wines greatly depends on the sufficient supply of quality grapes or grape juice. Currently, the Group has more than 10 major grape juice suppliers with whom the Group has enjoyed long-term relationships, mainly located in Tianjin, Hebei, Ningxia and Xinjiang. To ensure reliable supplies of quality grapes and grape juice, the Group continues to actively work with vignerons and equip their vineyards with state-of-the-art techniques for assuring quality. During the period, the Group also enhanced its industrial footprint, and procured quality grapes and grape juice from premium vineyards through setting up subsidiaries in Ningxia and Xinjiang, so as to raise the supply of the Group's products.

Mr. Wan Shoupeng, Chairman of Dynasty, concluded, "Looking ahead to the second half of 2023, Dynasty will kick off the development of the first phase of a winery near the Eastern foot of Helan Mountain in Ningxia, named TianXia Winery. The winery will integrate pressing, fermentation, processing, testing and research and development as a whole, with an annual production and processing capacity of 5,000 tonnes. It will become a new business growth driver of the Group and help to perfect the regional layout for the Group's grape wines. The Board currently remains cautiously optimistic on the business in the second half of 2023. It will continue to focus on product quality, reshape the consumption scene and guide market consumption, in order to create Dynasty as the representative brand of China's grape wines and Dynasty grape wines as the most signature products."

About Dynasty Fine Wines Group Limited
Dynasty Fine Wines Group Limited was listed on the Main Board of The Stock Exchange of Hong Kong Limited with the stock code 00828 on 26 January 2005. Founded in 1980, Dynasty is the premier grape winemaker in China. It is principally engaged in the production and sale of grape wine products under its reputable "Dynasty" brand. Dynasty is the first Sino-foreign joint venture wine company in China with Tianjin Food Group Limited and the French grape wine giant, Remy Cointreau, as its major shareholders. The Group produces and sells more than 100 grape wine product series, and introduces imported wine products, providing high-quality and value-for-money grape wines to the full range of consumer groups in China.

Source: Dynasty Fine Wines Group Limited
Sectors: Food & Beverage