In May 2021, New Hope Dairy (002946. SZ) put forward the strategic plan of “doubling in three years, striving to enter the leading ranks of the global dairy industry in five years, and eventually developing into a technology-driven world-class nutritional food company.”
At the beginning of the “Double the performance in three years,” the New Hope Dairy’s 2021 annual report shows promising results with double-digit growth in revenue and net profit. It is not very challenging to build another New Hope Dairy in three years to reach a revenue of CNY10 billion according to this growth rate. However, it is still challenging to achieve the strategic plan of entering the leading ranks in five years and the longer-term goal of becoming a “technology-driven world-class nutritional food company.”
The results report shows that New Hope Dairy in 2021 had revenue of CNY 8.97 billion (USD 1.32 billion), up 32.87% year-on-year; a net profit of CNY 312 million (USD 45.96 million), up 15.23% year-on-year. The net profit growth rate was as high as 33.21% after excluding the impact of equity incentives. Both growth rates were higher than the industry’s broad market.
2021 is the first full fiscal year after Xiajin Dairy entered the New Hope Dairy system. The performance report makes Xiajin Dairy a successful case of New Hope’s investment and integration management. In 2021, it saw revenue growth of 18% and net profit growth of over 20%. In December 2021, New Hope Dairy completed the delivery of a 5% stake in AustAsia, gaining access to a high-quality milk supply. AustAsia is in the process of sprinting for an IPO in Hong Kong, wanting to be the most significant “independent raw milk producer” in China. In the same year, New Hope Dairy invested in another milk supplier, Modern Dairy. This entity also achieved double-digit growth in revenue and net profit. The company expects to achieve the “five-year leadership plan” of doubling cattle inventory and milk production ahead of schedule.