DYNASTY’S PROFIT ATTRIBUTABLE TO OWNERS OF THE COMPANY INCREASES BY 73% TO HK$18.5 MILLION IN 1H2024

Dynasty Fine Wines Group Limited (Dynasty or the Group) (HKG: 0828), a premier grape winemaker in China, today announced its unaudited interim results for the six months ended 30 June 2024.

In the first half of 2024, benefiting from new consumption scenarios such as banquets and gatherings nationwide, as well as continuous innovation achieved by the Group in product and consumption scenarios, sales volume of the Group’s products (particularly mid-range grape wine products) increased steadily, with revenue improving by 6% year-on-year to approximately HK$135 million. Government grants received by the Group during the period increased by approximately HK$6.50 million. Profit attributable to owners of the Company also increased significantly by 73% year-on-year to HK$18.5 million in the first half of 2024. Basic earnings per share were approximately HK1.3 cents per share. During the period, due to increase in overall material costs, the Group’s overall gross profit margin mildly decreased from 37% for the same period last year to 36%.

Sales of white wines products of the Group grew well over the period and served as the Group’s primary revenue contributor. Sales revenue of red and white wines products accounted for approximately 45% and 51% of the Group’s overall revenue respectively for the period. During the period, the gross profit margin of red wine products and white wine products were 33% and 41% respectively (in the first half of 2023: 31% and 45% respectively).

The Group has continued to strengthen its presence in Ningxia and Xinjiang. This morning, Ningxia Tianxia Winery (Phase I) was completed three months ahead of schedule and officially commenced production. The grand completion cum grape pressing ceremony was held at the Ningxia Tianxia Winery, situated nearby Eastern foothill of Helan mountain, Ningxia, which is one of the key quality grape producing areas in China. The winery will integrate pressing, fermentation, processing, testing and research and development as a whole, with an annual production and processing capacity of 5,000 tonnes. The completion and commissioning of the project will greatly increase Dynasty’s capacity to produce premium wines, become a new driver for the Group’s long-term stable development and create new quality productive forces for the Group’s development. It is therefore an important milestone in Dynasty’s development history.

The Group has been actively pursuing innovation, embracing the “5+4+N” product strategy, with “N” standing for developing various customised products and continuously creating new products. During the period, the Group launched a new high-end product, i.e. Dynasty Chinese Zodiac Commemorative Dry Red Wine for the Jia Chen Year of Dragon, integrating the high quality with the Chinese zodiac culture and the leading rise of Chinese-style fashionable products. In addition, the Group launched a new product, Inherit Series “Passing on the Glory, Continuing the Brilliant Heritage”, at the 110th China Food & Drinks Fair in March this year, as well as other new products launched in the period such as Long Yun Series, Cabernet Reserve etc., to further improve its product matrix and provide consumers with diverse consumption choices. With leading and well-proven technologies it prides, the Group carried out comprehensive upgrade of its production techniques, packaging design, etc. With China chic on the rise, the new upgraded design is set to resonate with Chinese consumers confident of their culture, help strengthen awareness of the Dynasty brand and attract mainstream consumers fancying China-made products and China chic.

In addition to enriching the product matrix, the Group is accelerating the innovation of consumption scenarios and enhancing and strengthening the wine cultural experience. In June this year, Dynasty Starry Wine Bar was officially opened in Meijiang, Tianjin, the base of Dynasty. Starry Wine Bar is a pop-up offline bar meticulously designed by Dynasty to innovate the product experience, meet the diversified needs of consumers, and create new consumption scenarios in the country. It is committed to making consumers feel the warmth of the brand and recognise the value of the brand, thereby attracting more consumers through innovation.

During the period, the Group continued to develop the “Dynasty Tavern” through online channels, creating a series of product promotion articles on the WeChat official account of Dynasty Wines, and promoting Dynasty’s major mainstream products using new media formats. In addition, it integrated the night market environment to expand various wine drinking scenarios and promote Dynasty’s younger products.

Moreover, the Group sold chateau wine imported from France and other foreign branded wines in Chinese market through the Group’s existing distribution network to introduce some classic “old world” and “new world” varietals to cater for part of the market that prefers the taste of foreign premium wines.

Regarding online sales, the e-commerce team of the Group comprehensively operated online stores itself on the traditional e-commerce platforms, such as JD.com, Tmall and Pinduoduo for product sales, as well as comprehensive innovation on its brand, product categories, and business systems, procedures and models via interest-based e-commerce platforms, including RED, Kuai and TikTok. Such efforts facilitated the Group’s autonomous brand communications so that it could continue to gain the attention of mainstream consumer groups and demographic segments, and enhance effective market penetration of the Group’s products targeted at young consumers. The e-commerce team also actively cultivate e-commerce live broadcasting talents to further expand its sales channels so as to build up a new customer base. The Group continues investing resources for improvement of the online sales channels and optimisation of online stores interface so as to adapt to the changing customer consumption behaviour in China, and keeps promoting the exclusive products series for e-commerce platforms through channels such as live streaming or broadcasting.

Mr. Wan Shoupeng, Chairman of Dynasty, concluded, “Looking ahead to the second half of 2024, the Group will keep strengthening presence in Ningxia and Xinjiang to secure the supply of quality grapes and grape juice. Ningxia Tianxia Winery (Phase I) has completed construction and begun operation, which will become a new long-term and stable economic growth point of the Group and help the regional presence and layout of Dynasty, as well as in line with the overall planning and industry planning for the development of China’s wine industry. The Board currently remains cautious on the business prospects in the second half of 2024 and the Group will continue to proactively develop the new marketing prospects by innovation in products categories and consumption scenarios, carrying out cross-industry co-operations in order to boost sales volume, and be in line with the country’s commitment to stimulating domestic consumption.”

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About Dynasty Fine Wines Group Limited

Dynasty Fine Wines Group Limited was listed on the Main Board of The Stock Exchange of Hong Kong Limited with the stock code 00828 on 26 January 2005. Founded in 1980, Dynasty is the premier grape winemaker in China. It is principally engaged in the production and sale of grape wine products under its reputable “Dynasty” brand. Dynasty is the first Sino-foreign joint venture wine company in China with Tianjin Food Group Limited and the French grape wine giant, Remy Cointreau, as its current major shareholders. The Group produces and sells more than 100 grape wine product series, and introduces imported wine products, providing high-quality and value-for-money grape wines to the full range of consumer groups in China.