"We believe we will continuously benefit from both the nation’s rising income and living standards which will be reflected in the retail and consumption sectors in the long run.”  Ming Fai Chairman Ching Chi Fai.  Photo: Company

MING FAI International Holdings Ltd (HK: 3828), the world’s leading supplier of hotel and travel amenities, has been named “Hong Kong Outstanding Enterprise 2011” by Economic Digest.

The Hong Kong-headquarted firm, whose products like shampoos, shaving kits and soaps can be found in hotels and on board airlines the world over, currently sports an attractive P/E of just 4.7x versus a sector average of 15.6.

Ming Fai Chairman Ching Chi Fai accepted the award during a grand ceremony Monday at The Conrad Hotel Hong Kong.

Founded in 1981, Economic Digest is a professional finance magazine with the longest history for its genre and the largest readership in Hong Kong.

The "Hong Kong Outstanding Enterprise Parade" is in its eighth year since being launched in 2004, and aims to appraise and recognize companies with brilliant business performances over the past year, and encourages them to continue in their efforts.

The companies honored are selected from listed enterprises in Hong Kong by a panel of professional judges according to criteria including business performance, corporate governance and popularity among minority shareholders, amongst others.

This year, a total of 41 enterprises were given awards.

“With an outstanding business performance and a high level of corporate governance, Ming Fai Group has won different honors in the capital market. The award of ‘Hong Kong Outstanding Enterprise’ is definitely a notable recognition for Ming Fai and provides encouragement for all staff.

Chain Reaction: Ming Fai is betting its "7 Magic" chain of retail shops will propel sales across Greater China.  Photo: Company

“In the future, we will continue to make efforts in developing the hotel, airline and retail markets to grasp domestic and overseas opportunities, and further enhance shareholder value,” said Chairman Ching.

High profitability, low P/E

The Hong Kong-listed firm is coming off a very strong first half performance.

In the January-June period, Ming Fai’s top line shot up over 54% year-on-year to 706.8 mln hkd, producing a net profit increase of 39.3% to nearly 67 mln hkd.

"Despite this tough time, Ming Fai will continue to enhance its core values so as to gain more market share, broaden the profit base and diversify its business.”  Ming Fai Chairman Ching Chi Fai.
Photo: Company

Yet its current valuation is at 1.01 hkd, much closer to the lower end of its 52-week range (0.73 hkd) than its upper end (3.44 hkd).

But the company expected continued strong performance ahead to have an effect on its market situation.

Mr. Ching said Ming Fai managed a very strong half-year performance despite strong headwinds around the world.

“Doubt continued to surround the global economy amidst the US national debts and European sovereign debt crisis. Nevertheless, we will remain cautiously optimistic for both the short and long term outlook by adopting appropriate strategies to cope with the various challenges.”

He said that although rising labor and material costs affected the gross margin of the group’s operations in the first half of 2011, Ming Fai will continue to exercise “stringent control over production costs and improve manufacturing processes.”

“The PRC’s strong economic growth momentum, together with the central government’s 12th Five-Year plan, both give distinctive focus on increasing disposable income and intensifying urbanization, Ming Fai believes it will continuously benefit from both the nation’s rising incomes and living standards which will be reflected in the retail and consumption sectors in the long run.”

Looking forward, he added that Ming Fai will continue to focus its core business by soliciting orders from existing and new customers as well as to develop its new retail business.

“Sustainable development and the ability to generate long-term growth for its shareholders are still our priority. Despite this tough time, Ming Fai will continue to enhance its core values so as to gain more market share, broaden the profit base and diversify its business.”

Ming Fai is the leading global supplier to the hospitality, airline, travel and skin care industries. In November 2007, Ming Fai successfully listed on the main board of the Hong Kong Stock Exchange, becoming the first China-based hotel amenities supplier to go public. Ming Fai stepped into the cosmetics market in the PRC, launching a professional skin care brand “everyBody Labo” in December 2009. The brand now sells in Harvey Nichols and Mannings shops across Hong Kong, and is actively seeking expansion in the PRC market. In August 2010, Ming Fai successfully entered the domestic retail market with the acquisition of retail-chain brand “7Magic.” Ming Fai was awarded “Best Eco-Friendly Hotel Supplier of the Year” and “Most Outstanding Contribution Award of Low-Carbon Supplier” in 2010, and was ranked on the annual list of China's Greatest Potential Enterprises by Forbes in 2008, as well as being named as a China Hotel Industry Top 100 supplier.

See also:

MING FAI: Hotel & Airline Supplier Has Standout 1H, Yet Shares At 52-Wk Low

MING FAI: World’s Top Supplier To Hotels, Airlines Charging Ahead On Travel Boom

MING FAI Targets 2,000 PRC Cosmetics Stores This Year 

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