March 24, 2016

Higher sales revenues but fewer profits for Kingdomway in 2015

Despite an overall operating revenue of RMB1.204 billion (US$185.11 million) in 2015, an increase of 43.61% year-on-year, Kingdomway had suffered a decrease in net profit. The company recorded a net profit of RMB113 million (US$17.37 million), down 42.13%.

This is mainly due to a 6.37% and 19.23% drop in its sales revenues of coenzyme Q10 andvitamin A which accounts for 37.63% and 18.33% of the company's overall operating income respectively.

After more than a year-long fall, market analysts are expecting the price of vitamin A to bounce backin China this year, stimulated by the rapiddevelopment of large-scale pig farming which will help drive up the demand for vitamin A.

At present, 70% of the demand for vitamin A originated from the downstream feed industry, however, itonly accounts for about 1% of the total feed production cost. Hence, analysts predict that even with the increase in price of vitamin A, it will not significantly affect the price of feed.