Date
21 October 2018
Many youngsters in the mainland are so addicted to Vita Lemon Tea Drink that they consume several packs a day. Photo: HKEJ
Many youngsters in the mainland are so addicted to Vita Lemon Tea Drink that they consume several packs a day. Photo: HKEJ

Vitasoy shares surge on refreshing lemon tea sales in China

Hong Kong beverage firm Vitasoy International Holdings (00345.HK) has been promoting its signature milk products on the mainland over the last two decades, but it is the company’s lemon tea drink that has become most popular with Chinese consumers.

Vita Lemon Tea Drink has beaten household brands such as Coca-Cola and Wong Lo Kat to become the best-selling beverage brand on Alibaba Group’s Tmall.

Vitasoy’s lemon tea started to gain popularity in 2016, especially among the young generation.

Many youngsters are said to be so addicted to the drink that they consume several packs a day.

Vitasoy generated HK$3.7 billion in revenue from the mainland market for the year ended March 31, out of total sales of HK$6.46 billion.

No specific number is given for its lemon tea sales in the mainland. But figures from leading e-commerce sites can give us an idea of how popular the drink is in the country.

Vita Lemon Tea has topped the list of best-selling beverages on Tmall, the nation’s largest online shopping website.

A 250ml Vita Lemon Tea Drink is priced at 60 yuan (HK$72 or US$9.17) per 24 packs on the mainland, and around 1.2 million packs were sold in a recent week. By contrast, 24 packs of the same size of Lemon Black Tea produced by Tingyi are sold for 32.8 yuan. However, only 13,000 units were sold during the same period.

That means mainland consumers are willing to pay double for Vita Lemon Tea. The product is also the best-selling beverage on JD.com and Yihaodian.

I’ve asked several of my mainland friends why they are so addicted to Vitasoy’s lemon tea. They said the taste is truly refreshing, similar to black tea that has just been brewed.

As of June 22, Chinese investors held 13.64 million shares of Vitasoy through the Stock Connect scheme, representing 1.28 percent of its total share capital, up from 0.58 percent at the beginning of this year.

By contrast, the mainland investors’ holding of consumer plays such as Café de Coral (00341.HK) and Cathay Pacific (00293.HK) is only around 0.1 percent.

The popularity of Vita Lemon Tea may have prompted such investment interest.

The company’s share price has risen over 60 percent in the last 12 months, and its market value has reached HK$26.5 billion.

Price-to-earnings ratio has hit 45 times, even higher than that of Chinese smartphone maker Xiaomi.

– Contact us at [email protected]

RT/CG

Hong Kong Economic Journal columnist

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