Summary: Meihua Holdings released its Q3 performance report in late Oct., which shows that the company's operating revenue for Q3 climbed by 25.55% YoY and net profit attributable to equity holders for Q3 jumped by 168.95% YoY. In the reporting period, the company's animal nutrition amino acid products and food flavour and food property optimising products both presented great year-on-year increases in their respective operating revenues and net profits.

In late Oct., Meihua Holdings Group Co., Ltd. (Meihua Holdings) released its performance report for Q3 2022, the statistics of which are excerpted as follows:

Q3 2022

• Operating revenue: USD915.91 million (RMB6.60 billion), up 25.55% YoY
• Net profit attributable to equity holders of the Company: USD120.42 million (RMB868.24 million), up 168.95% YoY

According to the report, the year-on-year increase in the company's operating revenue for Q3 is mainly attributed to the following two factors:

• Firstly, the operating revenue of animal nutrition amino acid products climbed by 30.46% YoY. This is mainly because Jilin Meihua Amino Acid Co., Ltd., a subsidiary of Meihua Holdings, put the Phase III project into operation; thus, the company's production capacity for lysine reached 1,000,000 t/a. Consequently, the sales volume and selling price of lysine as well as other feed-related products rose in the reporting period.
• Secondly, the operating revenue of food flavour and food property optimising products climbed by 23.66% YoY, which is contributed by the uplift in the selling prices of main products including gourmet powder (MSG), I+G (IMP+GMP), and xanthan gum.

Additionally, the growth in operating revenue of the company's main business segments contributed to the huge year-on-year increase in net profit for Q3, and bolstered the company's profitability; Meihua Holdings' gross margin rose from 14.9% in Q3 2021 to 21.79% in Q3 2022, and its gross profit for Q3 went up by 83.62% YoY.

Q1–Q3 of 2022

• Operating revenue: USD2.89 billion (RMB20.82 billion), up 27.86% YoY; the growth can be attributed to:
• the year-on-year increase of 34.05% in the operating revenue of animal nutrition amino acid products for Q1–Q3
• the year-on-year increase of 24.22% in the operating revenue of food flavour and food property optimising products for Q1–Q3
• Net profit attributable to equity holders of the Company: USD477.80 million (RMB3.44 billion), up 159.49% YoY; the growth can be attributed to:
• the year-on-year rises in the operating revenues of main business segments
• the company's boosted profitability

Meihua Holdings' gross margin for Q1–Q3 of 2022 rose to 25.33% from 17% in Q1–Q3 of 2021, and its gross profit rose by 90.47% YoY.

Performance of Meihua Holdings' different segments

• Feed-grade amino acids (lysine, threonine, tryptophan, etc.): Operating revenue for Q1–Q3 of 2022: USD1.10 billion (RMB7.90 billion), up 31.82% YoY
• Operating revenue for Q1 2022: USD375.83 million (RMB2.71 billion), up 40.70% YoY;
• Operating revenue for Q2 2022: USD410.37 million (RMB2.96 billion), up 34.74% YoY;
• Operating revenue for Q3 2022: USD309.10 million (RMB2.23 billion), up 19.24% YoY.
• Operating revenue of pharmaceutical-grade amino acids (glutamine, proline, leucine, isoleucine, and adenosine) for Q1–Q3 of 2022: USD57.02 million (RMB411 million), up 6.20% YoY
• Operating revenue of flavour enhancers (MSG and nucleotide-based products) for Q1–Q3 of 2022: USD962.39 million (RMB6.94 billion), up 23.02% YoY

 

Operating revenue for Q1–Q3 of 2022, by region

• Domestic market: USD1.91 billion (RMB13.77 billion)
• Overseas market: USD978.62 million (RMB7.05 billion)

Specialising in the R&D, production, and sale of amino acid series products, Meihua Holdings has three production bases respectively located in Tongliao City of Inner Mongolia Autonomous Region, Wujiaqu City of Xinjiang Uygur Autonomous Region, and Baicheng City of Jilin Province. According to Meihua Holdings, the Phase III 300,000 t/a lysine project, located in Baicheng City of Jilin Province, has reached designed production capacity; the company will continue to advance the construction of threonine project in Tongliao City and other projects in the future. It is also worth noting that Meihua Holdings has put much effort into synthetic biology, and started to apply new and upgraded bacterial strains in the production of glutamic acid, threonine, and guanosine in H1 2022.