This is an English adaptation of a FoodBud historical article originally published on September 1, 2021.
Tingyi’s first-half 2021 results showed a clear split: instant noodles were under pressure, while beverages remained the stronger earnings engine.
For the six months ended June 30, 2021, Tingyi Holding reported revenue of RMB 35.396 billion, up 7.47% year on year. Gross profit was about RMB 10.992 billion, down 0.16%, and net profit attributable to shareholders was RMB 2.04 billion, down 14.5%.
In the first half of 2021, Tingyi’s instant noodle business generated RMB 12.722 billion in revenue, down 14.67% year on year. Net profit was RMB 890 million, down nearly 50%. Compared with the same period in 2019, however, the business was still up 10.2%.
Tingyi attributed the profit decline mainly to rising raw material costs and changes in product mix, especially the sharp increase in palm oil prices.
The company’s instant noodle portfolio included bowl/cup noodles, premium bag noodles, mid-priced bag noodles, crispy noodles and other products. In the first half, revenue from bowl/cup noodles and premium bag noodles declined year on year, while mid-priced bag noodles and crispy noodles/other products grew 15.86% and 27.9%, respectively.
Premiumization was becoming a key theme in instant noodles. The consumer-facing shift was visible in higher price points and more elaborate eating formats, moving from seasoning packets and hot water toward fresh meat broth and stove-cooked noodles.
Tingyi’s beverage business delivered RMB 22.276 billion in first-half revenue, up 26.45% year on year, 8.9 percentage points above the industry average. Net profit reached RMB 1.554 billion, up 39.80%.
By category:
Tingyi said the beverage business focused on core categories, added indoor consumption formats, expanded foodservice channels, and built new-retail home-delivery channels. It also shortened distribution layers while strengthening outlet coverage and service.
As of June 30, 2021, Tingyi’s accounts receivable book value was RMB 2.112 billion, up 18.52% from RMB 1.782 billion in the same period of 2020. Receivables turnover was 9.65 days, compared with 9.48 days a year earlier. The low level suggested strong bargaining power over downstream customers.
Accounts payable stood at RMB 9.412 billion, up 15.53% from RMB 8.147 billion at the end of 2020. The increase was close to the rise in receivables, but the absolute payable balance was much higher, supporting free cash flow and indicating bargaining power with suppliers.
Inventory was RMB 4.071 billion, up 20.52% from RMB 3.378 billion in the same period of 2020. Inventory turnover was 30 days, slightly higher than 27 days a year earlier, but still within a normal range and below rival Uni-President.
Interest-bearing borrowings were RMB 15.321 billion, up 11.86% from RMB 13.696 billion at the end of 2020. Long-term interest-bearing borrowings were RMB 8.816 billion, up RMB 1.01 billion, while short-term borrowings were RMB 6.507 billion, up RMB 616 million. The ratio of foreign-currency to RMB loans was 95:5, with most interest-bearing debt in foreign currency and used for purposes such as dividend payments. Cash on hand, including long-term bank deposits, was RMB 28.237 billion, leaving net cash of RMB 12.916 billion. First-half interest income was RMB 365 million, implying an annualized cash return of 2.59%.
Fixed assets had a book value of RMB 21.633 billion as of June 30, 2021, down from RMB 21.935 billion at the end of 2020. Since 2016, Tingyi had pursued an asset activation policy, disposing of older plants and equipment, so fixed asset book value and depreciation/amortization had declined in recent years.
According to Kantar’s 2021 Asia Brand Footprint report, Tingyi’s brand penetration reached 84.3% in 2020, ranking near the top of the sector.
Nielsen data showed that in the first half of 2021, China’s instant noodle industry declined 7.7% by volume and 7.3% by sales value. Tingyi’s instant noodle volume share was 45.4%, up 2.5 percentage points year on year, while sales value share was 47.9%, up 2.1 percentage points, keeping it in first place.
Because of rising raw material prices and product mix changes, the instant noodle gross margin fell 6.46 percentage points year on year to 23.89%.
Nielsen data also showed that China’s beverage industry grew 15.7% by volume and 17.6% by sales value in the first half of 2021. Tingyi’s ready-to-drink tea, including milk tea, held a 42.1% volume share and remained the market leader. Its juice volume share was 17.5%, ranking second. Packaged water volume share was 6.2%. Ready-to-drink coffee volume share was 12.1%, ranking second. Third-party monitoring data showed Pepsi carbonated beverages had a 33.2% overall volume share, ranking second.
In ready-to-drink coffee, Nielsen data showed first-half volume growth of 29.6% and sales value growth of 31.3%. During the period, Starbucks ready-to-drink coffee performed strongly, with new Frappuccino flavors and packaging helping increase Frappuccino share.
The pressure on instant noodles was not simply caused by food delivery. The article argued that the industry’s decline was tied to excessive internal price competition rather than market-building and consumer focus. Food delivery did not directly take the instant noodle market; instead, a gap appeared between low-end RMB 2-3 instant noodles and food delivery meals priced above RMB 30.
The category also faced reputational pressure from widespread discussion of instant noodles as unhealthy.
For premium instant noodles, the core idea was “restoring noodle-shop flavor.” Upgraded products paid more attention to taste fidelity, ingredient quality, toppings and broth.
Traditional instant noodles were still mainly sold offline, but premium noodles showed the opposite pattern, with larger scale and faster growth online.
As the category upgraded, it moved in two directions: convenience-first instant noodles, including traditional and newer steeping formats; and premium noodles focused on noodle-shop-level flavor reproduction. The former targeted groups such as Gen Z consumers in lower-tier cities, young consumers and blue-collar workers. The latter centered more on refined mothers, refined white-collar workers and established middle-class consumers.
According to China’s National Bureau of Statistics, beverage retail sales exceeded RMB 200 billion in 2020, reaching RMB 229.4 billion, up 14% from 2019. Output from beverage manufacturers above designated size reached 163.473 million tonnes in 2020.
On September 1, 2021, Qichacha data showed that Harbin Dingjin Food Co., Ltd.’s major shareholder changed from Tingyi (Shenyang) Beverage Co., Ltd. to Tingyi Beverage Holding Co., Ltd. Tingyi (Shenyang) Beverage’s stake fell from 74.7% to 49%, while Tingyi Beverage Holding’s stake rose from 25.29% to 51%.
Harbin Dingjin Food Co., Ltd. was established on July 5, 2002, with registered capital of USD 16.1765 million. Its legal representative was Cai Zhenyi, and its business scope included the production and sale of beverages and supporting packaging products.
Note: all financial, dividend-related and equity figures are historical and refer to the 2021 reporting period or dated company-registration information in the source.