Chinese infant formula group Beingmate Baby & Child Co. booked a 90% drop in 2014 net profit on lower sales and higher costs. 

The firm said net profit attributable to shareholders fell CNY65.7m (US$10.5m), down from CNY721m in the prior year. Operating profit was down 88.9% to CNY104.4m as higher costs and lower sales hit the group's performance. 

Revenue declined 17.24% in the period, dropping to CNY5.06bn. 

In a regulatory filing, the company said the "change in the industry continues to deepen" due to "the complex external environment". 

Regulatory issues as Beijing steps up supervision of infant formula companies, the proliferation of domestic manufacturers and consumer concern over safety issues have made the Chinese infant formula sector a challenging space in which to operate.

Beingmate has responded by attempting to strengthen its international supply chain for raw milk supply. To this end, the group entered into a partnership with Fonterra last year, which will see the New Zealand dairy giant buy a 20% stake in the business.

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Click here to view the filing in Chinese.