China Star Food Group’s profits crash 43.2% to RMB16.9m

On back of higher research, development costs.

China Star Food Group’s 3QFY16 net profit crashed 43.2% YoY to RMB16.9m, from RMB29.8m in the corresponding quarter of FY15 on back off increased research and development costs for new products to aid future sales as well as higher marketing and distribution costs.

According to the company’s media release, net profit for the nine months ended 31 december 2015 stood at RMB61.4m, excluding one-off reverse take-over expenses and goodwill which were written off.

Meanwhile, revenue jumped 18% YoY to RMB131.4m during the quarter. Candies was the highest revenue contributor at 35%, followed by baked goods (27%), pastries (13%), preserved foods (9%) crisps (8%) and roasted sweet potato nuts (8%).

“We have innovated and introduced new product mix, which has successfully reaped in higher revenue growth. We are optimistic that our marketing strategy to create brand awareness and expand sales channel will position the Group to harness the robust demand for sweet potato snacks in China. Meanwhile, we strive to improve cost management and operational efficiency to maintain our growth strategy,” stated the company’s executive chairman and CEO Liang Chengwang.