Dynasty Fine Wines Announces 2023 Annual Results

HONG KONG, Mar 28, 2024 - (ACN Newswire) - Dynasty Fine Wines Group Limited (“Dynasty” or “the Group”) (Stock Code: 00828), a premier grape winemaker in China, today announced its audited annual results for the year ended 31 December 2023 (“the Year”).

In 2023, the Group’s increase in revenue was primarily due to the recovery of sales, especially in the medium-end wine products, resulting from the normalisation of consumption scenes and resumption of consumer sentiment in the PRC after the dismantlement of pandemic control measures at the end of 2022. The Group’s operating activities continue to maintain a growth in sales during the year. During the Year, the revenue of the Group increased by 9% year-on-year to HK$262.8 million and the Group’s profit attributable to owners of the Company increased by 31% year-on-year to HK$21.3 million. Earnings per share of the Company (the “Share”) was HK$1.62 cents per Share based on the weighted average number of approximately 1,314.9 million Shares in issue during the Year. There was no potential dilutive Share for the year ended 31 December 2023.

Benefited from resumption of consumption scenario such as banquets and gatherings nationwide, sales of red wines products grew well over the year and served as the Group’s primary revenue contributor. Sales of red and white wines products accounted for approximately 52% and 44% for the year (2022: red and white wines: approximately 47% and 50%). The gross margin of red wine products and white wine products in 2023 were 32% and 38% respectively (2022 – 32% and 44% respectively). The overall gross profit margin decreased to 34% in 2023 (2022: 38%), mainly as due to increase in reimbursement of marketing expenses under sales arrangement and delivery charge (especially e-commerce sales) during the year.

The Group has been actively pursuing innovation, embracing the “5+4+N” product strategy. The Group produced a wide range of more than 100 wine products under the “Dynasty” brand to meet the demands and preferences of different consumer groups mainly in the mass-market segments in the PRC wine market. During the year, the Group launched a new high-end product, i.e. Dynasty Chinese Zodiac Commemorative Dry Red Wine for the Gui Mao Year of Rabbit, integrating the high quality with the Chinese zodiac culture and the leading rise of Chinese-style fashionable products. The Group also launched new products, including the NIANHUA series and Constellation series, FU series, via an improved business model, which is safeguarding channel profit while also meeting consumers’ demand for fine wines. Meanwhile, the Group has, heeding market and consumer demands, upgraded Golden Dynasty products and adopted new strategies to improve its existing product system. During the year, 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.

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

Regarding online sales, the Group continues putting resources for improvement of the online sales channels and optimisation of online stores interface so as to capture the change of customer consumption behavior in the PRC. During the year, apart from the existing exclusive products for e-commerce platforms, the Group had also been developing emerging marketing channels, such as live broadcasting. To strengthen brand awareness, the Group has launched a “Chinese style” edition showing its name in Chinese, to bring home its position as a domestic grape wine brand and also to attract mainstream e-commerce consumers who love domestic made products. The Group actively promoted the exclusive products series for e-commerce platforms via e-commerce channels. In addition to mainstream e-commerce platforms, efforts have been made to exploit new retail channels using such supplementary promotional means as live streaming or videos, with progress. The e-commerce sales grew significantly over the year, sales of which has doubled that of the last year 2022 and became another new growth point for the Group's revenue. The Group believes that the online platform not only serves as a business-to-customer trading platform between the Group and the consumers, but also an additional marketing and promotion channel for the brand. Thus, the platform should enhance the overall business potential of the Group.

The Group has a sufficient supply of quality grapes or grape juice. Currently, the Group has more than 10 major grape juice suppliers with whom the Group has enjoyed long-term relationships, mainly located in Tianjin, Hebei, Ningxia and Xinjiang. To optimise the supply network, the Group kept identifying new suppliers that comply with the quality requirements. The Group also strengthened presence by subsidiaries set up in Ningxia and Xinjiang during the year targeted to enhance the supply and procurement of quality grapes and grape juice in those regions with premium vineyards.

In the future, the Group will further strengthen presence in Ningxia and Xinjiang to secure the supply of quality grapes and grape juice, and continues the development of the first phase of a winery nearby Eastern foot of Helan Mountain in Ningxia, named Tianxia Winery, which is expected to be completed in the fourth quarter of 2024. 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 winery would become a new long-term and stable economic growth point of the Group and help the regional presence and layout of Dynasty wines, as well as in line with the overall planning and industry planning for the development of China’s wine industry.

Mr. Wan Shoupeng, Chairman of Dynasty, concluded, “Looking ahead to 2024, the Group will focus on product quality, reinvent consumption scenarios and strive to guide market spending, while continuing to build Dynasty into a brand representative of Chinese wines and its wines into iconic products, inheriting the classics. The Group will also be persistent in meeting consumer demand by pursuing innovations for its wine series. Meanwhile, the Group will invest more resources in brand development and e-commerce business to fully vitalize its brand and drive the development of its major products, with the aim of bringing Dynasty’s superior wines to more consumers in the PRC. In view of the continual resumption of economic growth and consumption in the PRC, especially robust in festivals, the Board currently remains cautiously optimistic on the business in 2024. The Group will continue to be well prepared to proactively develop the market, improve quality and boost sales volume, under the trend of support for the expansion of domestic consumption by the country.

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.

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