Archive for ‘market’

30/07/2019

Reckitt cuts sales target as China infant formula demand slows

LONDON (Reuters) – Reckitt Benckiser (RB.L) cut its full-year revenue target after reporting lower than expected second-quarter sales in its last quarter under long-time chief executive Rakesh Kapoor, hurt by a surprise slowdown in demand for infant formula in China.

Shares of the British household goods maker, which had risen the previous day to near their highest level for the year, fell as much as 5.7% in early trade.

The Durex condom and Lysol disinfectant maker said it now expects full-year like-for-like sales growth of between 2% and 3%, down from its previous target of 3% to 4%.

Reckitt, which maintained its “broadly flat” operating margin target, said slowing birth rates over the past two years and increased competition had led to market share losses for its Enfamil infant nutrition products in China, its biggest market for baby food.

The company is also recovering from supply chain disruptions in China, after technical issues at a baby formula factory in the Netherlands, which supplies the Asian market, prevented it from supplying retailers with formula in the third quarter of 2018.

The disruption forced mothers to turn to rival products and in part helped rival Danone (DANO.PA), which last week reported strong infant nutrition sales in China as its strategy to focus on more premium products paid off.

For Reckitt, the slowdown resulted in a surprise 1% drop in like-for like sales in its health business, even as sales of its over-the-counter products, such as Mucinex cough medicine, rebounded after several quarters of decline.

Analysts were expecting Reckitt’s Health business, which also sells Scholl foot products and Nurofen tablets, to rise 1.3%.

“Within Health, Infant and child nutrition was a big negative surprise,” Bernstein analyst Andrew Wood said, adding he expects the business to grow in the third quarter as it faces an easier comparison with last year.

DISAPPOINTING PERFORMANCE

Overall like-for-like sales were flat in the second quarter, missing the 1.9% growth analysts on average had expected, according to a company supplied consensus.

Net revenue rose 2% to 3.08 billion pounds against analysts’ average estimate of 3.13 billion.

The second-quarter report is the last under Chief Executive Rakesh Kapoor, who in September hands over to PepsiCo executive Laxman Narsimhan.

Kapoor said on a media call he was disappointed by the company’s performance in the first half but was “confident growth would be second-half weighted.”

Kapoor, CEO for the past eight years, said he was bullish that increased investments behind its brands and in medical channels, as well as new products such as Mucinex Night Shift and Enfagrow Pro Mental, and its expansion into new cities in China would help drive that growth.

He also said a plan to split the group into two business units – one for health and one for hygiene and home products – was on track for completion in mid to late 2020.

Still, analysts said the new CEO has a tough task.

“The patchy half-year figures mean the incoming CEO Laxman Narasimhan has a difficult job on his hands to try and put the business back on track, as well as decide the strategic future direction of the group,” investment firm AJ Bell said.

Reckitt shares were down 3% at 6,469 pence by 0830 GMT and were among the biggest losers in the FTSE .FTSE index.

Source: Reuters

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21/05/2019

Guangdong to fully open elderly care market

GUANGZHOU, May 20 (Xinhua) — South China’s Guangdong Province abolished an old regulation on the market access of elderly care institutions to boost the development of the industry, local civil affairs authorities said Monday.

A registration and filing system will be put into practice to replace the previous license system, which has been implemented since December 20, 2014, to lower the threshold for setting up elderly care institutions. Social sectors are encouraged to participate in the industry.

The provincial department of civil affairs will issue relevant policy documents on the registration and supervision of elderly care institutions, to further promote services for the aged in Guangdong.

China saw improved elderly care system, with 163,800 elderly care institutions and facilities offering 7.46 million beds for senior citizens as of the end of 2018.

A raft of measures are being taken to accelerate the development of the elderly care service industry, including fully opening the elderly care market by 2020.

Source: Xinhua

08/03/2019

China Focus: China to ramp up efforts to provide better elderly care

BEIJING, March 7 (Xinhua) — As China is faced with a growing aging population, the government has pledged to provide better elderly care services and facilities for the silver-haired, and give a strong boost to domestic demand.

Elderly care remains high on the agenda in this year’s government work report, which said that significant steps would be taken to develop elderly care, especially community elderly care services.

The number of people in China aged 60 and above reached 250 million by the end of 2018, accounting for 17.9 percent of the country’s population.

“Growing demand will trigger greater market potential in China’s senior care industry,” said Tang Wenxiang, founder of Fullcheer Group, a major elderly care services provider based in Changsha, capital of central China’s Hunan Province.

Fullcheer Group has 50 branches in more than 10 provinces and cities with a total of 5,000 beds. Tang expects the number of his company’s beds to increase to 50,000 in five years.

“There is still a huge gap between the demand of China’s aging population and the number of elder care facilities,” Tang said.

The country will provide support to institutions offering services in the community like day care, rehabilitation care, and assisted meal services and outdoor fitness services using measures such as tax and fee cuts and exemptions, funding support, and lower charges for water, electricity, gas and heating, according to the government work report.

Tang said government’s measures to develop elderly care services greatly boosted the confidence of entrepreneurs who run businesses in the sector.

Developing the elderly care industry is good for improving people’s well-being and stimulating consumption, said Xu Hongcai, an economist with the China Center for International Economic Exchanges.

“Consumption on elderly care requires the supply of the elder care market, offered by both the government and the market,” he said.

A research report issued by Guolian Securities suggests that a string of policies have been carried out in China to encourage the participation of the social sector in the senior care industry, which will boost the country’s consumption in the health and medical sectors.

As China opens this sector, foreign firms such as France’s Orpea and Japan’s Nichii have tapped the elderly service market in China.

China still lacks leading players in the senior care market which includes nursing care, rehabilitation assistive devices and daily necessities for seniors, Tang said.

The long-term care insurance system will help increase the occupancy rate of some elderly services facilities given a number of elderly people can hardly afford the expenses, according to Tang.

Source: Xinhua