Even as it struggles with weaker salmon prices and rising debt loads, Legend Holding’s Joyvio Group, which has in recent years made a significant investment into the global seafood industry, has had scored a win with an investment into a seafood snack-maker focused on the Chinese domestic market.
Hunan Huawen Food Co. has announced a 32 percent increase in profitability for the first three quarters of 2020. Its profits grew to CNY 139 million (USD 20.8 million, EUR 18.1 million), on seven percent higher year-on-year revenue, at CNY 1.57 billion (USD 235 million, EUR 204 million).
The Joyvio Group took a controlling share in the firm in 2016 for CNY 200 million (USD 30 million, EUR 26 million) and has been helpful with sourcing, standards, and online sales strategies, according to Huawen Chairman Zhou Jinsong, writing in a recent letter to investors.
Zhou’s company, which imports anchovies from Southeast Asia and elsewhere for its fried, packaged snacks, grew its revenue between 2017 to 2019 from CNY 767 million (USD 115 million, EUR 99.7 million) to CNY 895 million (USD 134.2 million, EUR 116.3 million) in 2019, and increased its profits from CNY 75.6 (USD 11.3 million, EUR 9.8 million) to CNY 118 million (USD 17.7 million, EUR 15.3 million).
Zhou describes Huawen as “the only seafood snack stock in China,” with the company listing on the Shenzhen Stock Exchange board this autumn. The company is banking on rising Chinese consumption of snack food and in its stock listing prospectus made reference to a Frost & Sullivan report on Chinese snack food, valuing the market at USD 16 billion (EUR 13.4 billion) in 2020 – a trebling of the figure from 2010. Chinese per-capita consumption is around 10 percent of those of Japan and the United Kingdom, according to the consultancy, though it’s not clear if Frost & Sullivan’s figures capture non-packaged snack foods like street food, which is popular in Chinese cities.
Huawen is a major buyer of “small fish” from Asian suppliers, according to the company’s prospectus. Bangladesh’s ambassador to China visited the Hua Wen headquarters in August to discuss cooperation and sourcing from Bangladeshi suppliers, according to the firm.
Formerly known as Wanfu Biotechnology Hunan Agricultural Development Co, Joyvio Group is a subsidiary of Legend Holdings, a Hong Kong-listed entity which diversified into food production in the past decade to cash in on rising demand among China’s middle classes for quality foods.
Last Year, Joyvio purchased Santiago, Chile-based salmon farming firm Australis Seafoods for USD 922 million (EUR 820 million). Since then, Joyvio has spent significantly to shore up Australis, which has taken a hit this year due to COVID-19 restrictions.
Photo courtesy of Hunan Huawen Food Co.
