A battle for China’s middle-income customers is proving hard work for food processor Haixin Foods Co Ltd., which saw revenues up 18 percent in the first half of 2019, thanks to demand for frozen convenience seafood products.
Listed on the Shanghai Stock Market, Fujian, China-based Haixin scored sales of CNY 542 million (USD 76.8 million, EUR 69.3 million) in the first half of 2019, with seafood accounting for CNY 399 million (USD 56.6 million, EUR 51 million) of that total
Yet profits attributable to shareholders at CNY 7 million (USD 990,000, EUR 894,400) are down 32 percent, as Haixin spends big on marketing its frozen fish and lobster balls.
Haixin CEO Yong Yan Teng has set an ambitious target of pulling his firm away from the congested “low-priced competition” snack food segment towards higher-margin, branded products for middle-class consumers. Company marketing events like “China Hot Pot Festival” have been designed to generate media coverage for the company’s packaged products.
The firm hit sales of CNY 1.14 billion (USD 162.3 million, EUR 145.6 million) in 2018, up 18.2 percent. Profit attributable to shareholders rose 228 percent last year after a surge in final quarter sales, totaling CNY 34.9 million (USD 4.9 million, EUR 4.5 million) – well ahead of expectations. The firm lost CNY 17 million (USD 2.4 million, EUR 2.2 million) in 2017 as it scrambled to build sales.
Haixin has heavily promoted its range of frozen and room-temperature seafood and meat products with fish balls, lobster balls, fried cod, tofu, and crab cream all aimed at affluent younger consumers and the hot pot restaurant scene. Haixin recently purchased another seafood processor, Changheng Foods (Fujian), to increase output of frozen as well as room temperature "leisure food" products like crab sticks, fish tofu, and crab cream rolls.
