Leading Chinese seafood processor and shrimp exporter Zhanjiang Guolian Aquatic is flagging a sharp drop in profits for the first half of 2019 as it counts the cost of increased marketing activity to grow its domestic markets.
The company is projecting net profits for its listed arm of up to CNY 15 million (USD 2.1 million, EUR 1.9 million) – down by 97 percent year-on-year – in the first half of this year, according to a Guolian projection circulated to investors. At the same time, income is projected to rise 14 percent in the first six months of the year to CNY 2.5 billion (USD 363 million, EUR 323 million). Guolian has also announced its domestic market sales rose 67 percent in the first half of the year compared to the same period in 2018, suggesting success for the company’s five-year strategy – announced in 2016 – of growing domestic market sales and diversifying away from a dependence on the U.S. for export sales.
It’s worth looking at how much the company has invested in market expansion over the past four years. Guolian booked a profit of RMB 19.8 million (USD 2.8 million, EUR 2.5 million) in profit for the first six months of 2015, according to company figures, suggesting profit slipped once the firm’s five-year growth strategy kicked in the following year. Guolian’s full year net profit has remained static at CNY 144 million (USD 20.9 million, EUR 18.6 million) in 2017 and 2018.
Guolian has sought to drive local sales by entering into crayfish processing while expanding distribution channels for its “Long Ba” frozen shrimp line.
