Tsit Wing Recorded Revenue of HK$785 Million for FY2019

Profit Attributable to Owners of the Parent From Continuing Operations for the Year Increased by 22.6%

Strengthen online and offline sales in beverage solutions; Expand frozen processed food business

Highlights

• Revenue reached HK$785 million
• Gross profit amounted to HK$309.8 million
• Profit attributable to owners of the parent from continuing operations for the year reached HK$89.8 million, representing an increase of 22.6% as compared with last year
• Adjusted profit attributable to owners of the parent* increased by 6.7% to HK$93.3 million
• Strengthen beverage solutions by extending in Shanghai and three cities in the Greater Bay Area and expanding online channel
• Intend to offer meat processing services and increase the varieties of processed food products to caterers and customers

Financial Highlights

*Excluding a number of nonrecurring income, costs and charges and certain of other non-cash charges

HONG KONG, CHINA - Media OutReach - 5 March 2020 - Tsit Wing International Holdings Limited ("Tsit Wing", together with its subsidiaries, the "Group"; stock code: 2119), an integrated B2B coffee and black tea solutions provider, announced its annual result. For the year ended 31 December 2019 (the "Reporting Period"), Tsit Wing recorded a total revenue from continuing operations of HK$785.0 million (2018: HK$831.1 million), which was primarily due to the decrease in revenue derived from beverage solutions business, and to a lesser extent, the decrease in revenue derived from the food products business.

If a number of nonrecurring income, costs and charges and certain of other non-cash charges was excluded, adjusted profit attributable to owners of the parent reached HK$93.3 million (2018: HK$87.4 million), representing an increase of 6.7%.

The Board has proposed the payment of a final dividend of HK3.33 cents per ordinary share in respect of the year ended 31 December 2019 (2018: HK5.78 cents per ordinary share).

Business Review

The Group is a leading integrated B2B coffee and black tea solutions provider in Hong Kong, Macau and Mainland China providing one-stop coffee and tea solutions to commercial customers. The Group will continue to consolidate its core business in beverage solutions, as well as to deepen its market penetration in food market. The Group has also diversified its sales lead by starting its online sales platform on Tmall.com in December 2019 to reach out to more retail customers and widen its customers base.

Beverage solutions

During the Reporting Period, revenue from the beverage solutions segment recorded HK$765.6 million (2018: HK$808.7 million). The decrease was primarily due to the decrease in revenue derived from instant beverage mix products in Mainland China. Gross profit decreased by 1% to HK$305 million (2018: 308.1 million). Gross profit margin increased to 39.8% (2018: 38.1%), primarily because of the relatively higher gross profit margin generated from coffee and tea products.

Food products

During the Reporting Period, because of the decrease in revenue derived from Mainland China, the revenue from the food products segment recorded HK$19.4 million (2018: HK$22.3 million), with gross profit of HK$4.9 million (2018: HK$6.0 million) and gross profit margin of 25.2% (2018: 27.1%), due to the change of product mix.

Revenue by geographic locations

During the Reporting Period, revenue generated in Hong Kong maintained at HK$499.0 million, which was a result of increase in sales of coffee, tea and milk products, offset by the decrease in sales of groceries items. Revenue generated in Mainland China recorded HK$267.0 million (2018: HK$314.0 million). Revenue generated in Macau and other countries, including Canada, Taiwan, Australia, Malaysia and Philippines, increased by 5.2% to HK$19.0 million which primarily a result of growth in customers' demand in Macau.

Business Prospect

As a leading integrated B2B coffee and black tea solutions provider in Hong Kong, Macau and Mainland China, the Group will endeavour to consolidate its core business in beverage solutions. Also, the Group will continue to strengthen its market penetration of the food products.

For the beverage solutions business, the Group will expand its customer base by extending its presence in Shanghai and three cities in the Greater Bay Area, namely Shenzhen, Dongguan and Guangzhou by exploring business opportunities and strategic partnership with more caterers, restaurant groups and beverage chains etc. in Mainland China. Meanwhile, the Group will also further extend the product-mix by exploring and sourcing high-quality food and beverage products that carry great potential from other countries to ensure the Group is on the cutting edge of the food and beverage solutions provider industry.

Seeing the upcoming trend of online consumption, the Group will further expand its sales through online channel. Other than the online platform that sells the products of the Group, the Group intends to invite its strategic partners and other international brands to trade and sell their food and beverage products on another online platform that will be launched and managed by the Group in the near future.

For the food product business, the Group aims to branch out its frozen processed food business by offering meat processing services and increasing the varieties of processed food products to caterers and customers. Building on the Group's experience in providing frozen meat and frozen processed food, the long-standing partnership with suppliers and a well-established network of clients and distributors. The Group believes that the tailor-made frozen and chilled food business can earn recognition from both corporate and individual customers, thereby enhancing the Group's share in the food and beverage market.

About Tsit Wing International Holdings Limited

Tsit Wing is a leading integrated B2B food and beverage solutions provider in Hong Kong, Macau and the PRC with 87-year heritage. According to research, coffee sold by the Group translates into almost 337.7 million cups of coffee and 403.2 million cups of milk tea per year. Tsit Wing commenced its frozen meat business in Hong Kong and the PRC since 2013 and has been dedicated to developing an integrated food and beverage solutions platform for its customers.