Chinese conglomerate Dah Chong Hong Holdings reported a 7.1% drop in food segment sales today (28 February) as a slowdown in mainland China dented the group’s performance. 

The conglomerate, whose businesses span the motor, CPG and healthcare industries, said that food sales dropped to HKD9.95bn (US$1.28bn) in the 12 months to end-December. 

In mainland China, food sales decreased by 12.8%. DCH attributed the fall to high inventory levels which, the company said, have accumulated as a result of a “slowdown of sales in the past few years”. 

This issue forced the company to record an operating loss of HKD104m for the unit. “We seriously scrutinised our inventory and all other balance sheet items including receivables and decided to make sufficient provisions in the year to cover the risk. As such, the segment recorded a loss from operations,” the group noted. 

DCH’s operations in Hong Kong also reported lower turnover and operating profit, which fell by 3.7% and 1.5% respectively. The group said its sales were hit by the “ongoing economic downturn”, weak local consumer sentiment and a slowdown in inbound tourism. 

On a group-wide basis, DCH actually booked higher sales. Turnover of the group increased 3.7% to HKD46.46bn. However, the write-down of its food inventory dragged on group profits, which fell by 10.4% to HKD511m. 

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

DCH supplies and distributes a range of food brands in China. According to its website, DCH handles products for companies including meat processors BRF and Tyson Foods, as well as produce supplier Dole Food Co., in Hong Kong, Macau and China.