Recently, China Feihe Ltd. released a semiannual report for the first half of 2021. The financial report showed that as of June
30, 2021, Feihe's revenue was RMB 11.5 billion, a YoY increase of 32.6%. The performance was stable and
exceeded market expectations.
Since 2016, Feihe's revenue has maintained double-digit growth for five consecutive years, and its performance growth is stable and predictable. In addition, in 2020, Feihe completed the acquisition of YuanShengTai Dairy Farm Ltd. According to a financial report recently released by YuanShengTai, the company's revenue in the first half of 2021 was RMB 837 million, a YoY increase of 11.45% compared with RMB 751 million during the same period last year.
According to a recent report, as of May 2021, Feihe's overall market share of infant formula milk
powder in China has increased to 19.2%, compared to 15.2% last year, and its leading position in the industry has
become increasingly stable. Feihe's market share is expected to continually increase.
At the same time, the global economy has been volatile during the past two years with increasing market uncertainty, which has also brought challenges to the milk powder industry. At the end of 2020, Feihe set a sales target of 35 billion yuan for 2023, and 2021 will be the first year that Feihe will strive to reach this goal. Therefore, the year 2021 will be critical for Feihe.
Feihe invests in supply chain consolidations
For mature industries, industrial competition is often no longer between enterprises and enterprises, but rather between industrial chains, and the upstream development of the milk powder industry is critical for dairy enterprises.
Since 2007, Feihe has built an industrial cluster covering the entire industrial chain and has built an exclusive farm of 20,000 hectares. Feihe's performance report shows that in the first half of 2021, Feihe has completed the expansion of a Longjiang plant and a new Harbin plant. As of June 30, Feihe has 8 modern factories with an annual production capacity of 260,000 tons, a YoY increase of more than 67,000 tons. Additionally, in the first half of 2021, Feihe's non-current assets included 7.462 billion yuan in property, plant and facilities, YoY increase of 3.69% compared to 7.197 billion yuan last year.
Feihe leads dairy industry in research and development
Feihe also has recently made continual investments into new research and development. With long-term goals in mind, Feihe has been driving scientific research since it proposed a formula “more suitable for the physique of Chinese babies” in 2015. Additionally, Feihe recently released a study describing the key proportions of the three major fatty acids in Chinese breast milk, and accurately outlined the dynamic changes of amino acids and active proteins during the lactation period of Chinese breast milk.
This is one of the largest summaries of Chinese breast milk constituents in the current published academic literature, helping the industry to gain a deeper understanding of the original composition of Chinese breast milk. Recent data shows that from 2016 to 2020, Feihe's compound growth rate of research and development expenses exceeded 109%, and its research and development personnel have increased threefold. With the YoY increase in research and development investment, Feihe also achieved fruitful research results during the reporting period.
For more information on China’s dairy market, please check our Dairy Products China News.
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