* Q3 net profit $155.9 mln vs analysts' forecast of $162 mln
* Revenues climb 33.6 pct to $2.95 bln
* Gross profit margin up 4.18 percentage point to 31.32 pct
* Shares up 0.4 pct year to date, lags benchmark index
* Shares up 1.7 pct prior to results, benchmark up 0.7 pct
HONG KONG, Nov 19 China drinks and instant
noodle maker Tingyi returned to profit growth in the
third quarter, as demand for consumer staples climbed amid signs
of a stabilising domestic economy and as raw material costs
The 19.4 percent rise for Tingyi (Cayman Islands) Holding
Corp's third-quarter net profit was a turnaround from a profit
decline in the second quarter, and was also due to greater
production efficiency at bottling plants that it operates under
a broad partnership with PepsiCo Inc.
Tingyi, which commands just over half of China's $8.8
billion instant noodle market, has also been able to weather the
country's economic slowdown better than rivals, thanks to its
leading positions in both drinks and noodles, taking advantage
of greater economies of scale.
The company, which sells noodles under the Master Kong
brand, said on Monday that net profit for the three months ended
in September totalled $155.9 million, although that fell a
little short of an average forecast of $162 million from six
analysts polled by Reuters.
Tingyi's Chairman, Wei Ing-Chou, said in a statement that he
expects China's economy to continue to improve after bottoming
out in the third.
"In view of looser fiscal and monetary policies, we expect
the economic situation to improve in the fourth quarter, but to
a limited extent," he said, adding the food and beverage
industry was still grappling with intense competition.
Recent China data for October has provided further signs
that a long slide in economic growth may be over.
DRINK REVENUE JUMPS
The third-quarter profit rise follows an 18.6 percent drop
in the second quarter, which had been its first annual profit
decline in three quarters.
Shares of Tingyi are up just 0.4 percent for the year to
date, lagging a 15 percent gain for the benchmark Hang Seng
Index as it lacks the growth catalysts that have helped
other industries find more favour with investors.
On Monday, it was trading up 1.7 percent prior to the
results compared to an 0.7 percent rise for the benchmark.
Third-quarter revenue for Tingyi increased 33.6 percent to
$2.95 billion, with sales of drinks, which account for about 62
percent of revenue, soaring 57 percent to $1.82 billion. Sales
of instant noodles which account for some 35 percent of revenue,
rose 7.2 percent to $1.04 billion.
Gross profit margin for the third quarter rose 4.18
percentage point to 31.32 percent, helped by declines in prices
for sugar, palm oil and packaging materials.
Tingyi, which competes with smaller rival Uni-President
China Holdings Ltd, said its profit amounted to $440.3
million for the first nine months of 2012, up from $359.6
million a year ago.