E-Malt.com News article: China: Brewer-maltster Sabre Industrial reports record performance in Q3

Sabre Industrial Inc., also known as Tsingyuan Holding Inc., a Shandong-based leading manufacturer and distributor of brewer's malt and beer in China, announced on November, 16 its third quarter financial results and provided a business update.

The company’s revenue increased 388% to $18.5 million compared to $3.8 million for Q3 2009. Gross profit soared 279% to $4.1 million versus $1.1 million for Q3 2009. Operating income grew 295% to $3.9 million versus $1.0 million for Q3 2009, the company said.

Net income increased 350% to $3.0 million, or $0.02 per share, versus $0.7 million for Q3 2009.

Zhang Dingyou, Chief Executive Officer, commented, "We are very pleased to report a 388% increase in revenue to $18.5 million, which exceeded our combined sales for the entire first half of 2010. The beer industry in China continues to grow rapidly due to increased discretionary spending, especially in the second- and the third-tier cities where we are focused. In particular, these consumers are looking for well-crafted yet moderately priced beer. In fact, 90% of the beer produced in China today is low quality, low price beer developed to meet the demands of a less developed economy. Our recent growth clearly illustrates that our brands have resonated with the growing middle-class consumers and we are rapidly gaining market share. Our brewing professionals come from the leading beer companies and we use the latest brewing technologies. We are also known for the high quality natural spring water used in our manufacturing process. We now offer 9 varieties of beer, catering to a wide array of palates and seasonal trends."

Mr. Zhang continued, "In addition to growing beer sales, we have also seen strong growth in our brewer's malt line of products, which we sell to breweries in 10 provinces across China. We've established ourselves as a high-end producer of malt due to our insistence on importing barley from Australia, France and Canada, as well as our use of high-quality Dongbei rice and the best hops from Ganshu Province."

Zhang Dingyou continued, "In addition to our strong brand, we have also established an extensive sales and distribution network across China, which spans Shandong, Hebei, Tianjin, Henan, Anhui, Jiangsu, and Shanxi provinces. We plan to leverage our brand, our malt production, and our nationwide distribution network by acquiring regional brewers that are well established in their respective markets. In addition to expanding our product portfolio, we can gradually introduce our own brand into these markets. The beer market in China is highly fragmented, especially within the tier II and tier III markets. We believe we can acquire these companies at highly accretive multiples, and then increase capacity utilization to achieve meaningful operating leverage and economies of scale."

Revenue for the third quarter ended September 30, 2010 increased 388% to $18.5 million, compared to $3.8 million for the third quarter ended September 30, 2009. Gross profit increased 279% to $4.1 million for the three months ended September 30, 2010, compared to $1.1 million for the third quarter ended September 30, 2009. Operating income increased 295% to $3.9 million for the three months ended September 30, 2010, compared to $1.0 million for the same period last year. Net income for the three months ended September 30, 2010 increased 350% to $3.0 million, or $0.02 per diluted share, compared to $0.7 million for the same period last year.

Revenue for the nine months ended September 30, 2010 increased 233% to $32.9 million, compared to $9.9 million for the nine months ended September 30, 2009. Gross profit increased 188% to $6.7 million for the nine months ended September 30, 2010, compared to $2.3 million for the nine months ended September 30, 2009. Operating income increased 197% to $6.3 million for the nine months ended September 30, 2010, compared to $2.1 million for the same period last year. Net income for the nine months ended September 30, 2010 increased 229% to $4.8 million, or $0.04 per share, compared to $1.5 million for the same period last year.


17 November, 2010