Sales revenue of Xi Wang’s health products exceeds that of its main edible oil business

October 20, Xi Wang released Q3 report of 2017 showing in the first three quarters a revenue of about 4.281 billion yuan, and a net profit of about 202 million yuan. Among them, the third quarter alone has achieved a revenue of 1.4 billion yuan, with a year-on-year increase of 75.46%, and a net profit increase of 184.51%. At present, its nutritional supplements revenue and profits have exceeded the main business, edible oil.

Xi Wang explained in its previous performance forecast that due to Q3’s incorporated revenue and the profit of Kerr, a Canadian company acquired last year, the company recorded a substantial increase in revenue and good profit growth in the corn oil sector in Q3. Data show that Kerr is a well-known Canadian sports nutrition and health food distributor, which was bought last year by Xi Wang Food and Chunhua Capital at $730 million US (about 4.8 billion yuan) in a wholly-owned acquisition. After the Kerr merger, Xi Wang’s nutritional revenue and profits have exceeded the main cooking oil business. The sport nutrition section has become Xi Wang Food’s pillar industry. In the first half of 2017, monthly sales of the Tmall flagship store increased by 100% over the same period of last year. The Xi Wang 2017 semi-annual report also shows that the nutrition supplements section revenue reached 1.665 billion yuan, with a gross profit margin of 43.74%, while the vegetable oil section revenue was 10.22 billion yuan, with a gross profit margin of 33.8%.

Xi Wang Food said that the next step will be efforts to achieve a smooth transition of management and rapid development of Kerr through effective control and full authorization.

MuscleTech achieves successful online sales and expects further improvement

Kerr's products have a strong brand name in the North American market. Kerr will formally enter the Chinese market after the completion of a consolidated financial statement. Xi Wang will also continue to increase marketing efforts to expand the domestic market, building a base for the brand, and enhancing product visibility by participating in international fitness events such as the Nike Fitness Festival and a series of other activities. Xi Wang has also signed a strategic cooperation agreement with WEDER-TERA and Ali health, which has greatly enhanced domestic brand awareness and sales volume of products in the weight management and sports nutrition supplement business. MuscleTech continued its high performance with Tmall, Jingdong and other online channels, as well as offline fitness institutions. With the concept of weight management and sports nutrition continuing to penetrate, sports and fitness and other healthy lifestyles have become more normalized. The company's marketing investment in China will accelerate its transformation into performance. In the next two years, the company will continue to acquire the remaining equity interest in Kerr, and this part of its business revenue is expected to accelerate.

Annual performance is getting better

The Fourth Quarter Outlook: The company has gotten approval for designated placement and is now at the stage of a road show, which is expected to be completed in mid-November. Hence in 2018 it is expected that the company can reduce the financial costs of 85 million yuan. The Employee Stock Ownership Scheme is also steadily advancing and is expected to be completed before the end of the year. Impact of the group’s Qi Xing issue is nearing an end, short financial bonds are successfully issued, and the capital chain is worry-free.