Dynasty Fine Wines 2021 Revenue Rises Notably by 28% to HKD306 Million Due to Successful “5+4+N” Product Strategy

Dynasty Fine Wines Group Limited (“Dynasty” or “the Group”) (Stock Code: 828), a premier grape winemaker in China, today announced its audited annual results for the year ended 31 December 2021. Revenue in 2021 increased by 28% year-on-year to HK$306 million. Gross profit rose by 103% year-on-year to HK$121.9 million. Gross profit margin increased significantly from 25% in 2020 to 40% in 2021. Profit attributable to owners of the Company was HK$32.8 million in 2021, a decrease when compared with HK$116.4 million in 2020. The decline was due to a net gain (after tax) of HK$183.7 million from a disposal, which was a one-off transaction, recorded in 2020. If the net gain of the one-off disposal in 2020 was excluded, profit attributable to owners of the Company would have increased significantly in 2021 versus the preceding year.

In 2021, the revenue of wine products grew, mainly due to a marked increase in sales volume of products, especially middle to high-end wine products, after optimization of the Group’s product mix, as well as the increase in market price of certain upgraded and custom-made products during the year. In the second half of 2021, the occurrences of flooding and heavy rain and sporadic COVID-19 cases in certain regions of China adversely affected consumer sentiment. Consequently, the Group’s revenue growth for the full 2021 financial year slowed relative to the first half year.

The total number of bottles of wine sold in 2021 was approximately 11.9 million, an increase of 20% as compared with 9.9 million bottles in 2020. Red wines continued to be the Group’s primary revenue contributor, accounting for approximately 51% of the Group’s revenue for the year (2020: 65%). White wine sales became the growth driver of the Group, which surged by approximately 60% year-on-year and accounted for 40% of the Group’ revenue. In 2021, the gross margin of red wine products and white wine products were 37% and 47%, respectively (2020: 24% and 31%, respectively).

The Group produced a wide range of more than 100 wine products under the “Dynasty” brand. This has enabled it to meet the demands and preferences of different consumer groups, mainly in the mass segment of the Chinese wine market. During the year, the Group launched a new premium product, Dynasty Chinese Zodiac Commemorative Dry Red Wine, for the Xin Chou Year of the Ox, integrating high quality with the Chinese zodiac culture. The Group also unveiled two new product series, namely “Sweet Heart” and “Pleasant Color”, for the entry-level product segment. The product series are targeted at young consumers and will open a new chapter as part of the Group’s product rejuvenation strategy.

The Group also sold foreign branded wines during the year. Imported mainly from France, Italy, Australia, Chile and the United States, the wines enter the Chinese market through the Group’s existing distribution network. Having streamlined its portfolio, the Group currently sells about 50 imported grape wine products under approximately 10 brands.

During the year, the Group strengthened cooperation with distributors to operate online stores on such e-commerce platforms as JD.com, Tmall and Pinduoduo. Moreover, innovations were achieved across its brands and product categories, as well as business systems, procedures and models via new retail platforms including Weibo, RED (Xiaohongshu app), Kuai (Kuaishou app) and TikTok (Douyin app). The Group also established an e-commerce team and actively cultivated e-commerce live broadcasting talent to further expand its sales channels and build up a new customer base.

In October 2021, Dynasty held a grand opening ceremony in the new premises of its National-level Technology Center. The work station in the Center has commenced research for the first time on the selection of distinctive muscat yeast in order to create more mellow and enjoyable wines. Also, Dynasty Technology Center established a winemaking and wine tasting studio during the year.

In 2021, Dynasty continued to implement its market demand-oriented “5+4+N” product strategy, and completed the enhancement of the Group’s organization structure. In the Group’s strategy, “5” represents the five key series of products, comprising air dry series, seven-year reserve series, merlot series, classic series and best-selling series, and represents the goal of having full coverage of all mainstream price segments; “4” refers to the four advantageous categories, i.e. dry red wines, dry white wines, brandy and sparkling wines, and the aim of increasing the Group’s vertical market share; and “N” stands for the development of “N” kinds of customized products to meet the diversified needs of Chinese consumers. In 2021, the Group achieved remarkable results from the adjustment of its products, sales channels and marketing campaigns.

With respect to its large-scale marketing campaign, the Group forged ahead with various endeavors, including showcasing products in 20,000 shops, hosting 1,000 wine tasting events and organizing 100 plant visits, so as to continue developing its point-of-sale network.

In the coming three years, the Group will strive to deploy 100,000 points of sale, add 1,000 distributors, and vigorously develop new channels via retail platforms. This will enable the Group to seize opportunities from the growing consumption market driven by young adults, and achieve the annual sales target of over RMB1 billion.

Mr. Wan Shoupeng, Chairman of Dynasty, said, “The Group is pleased that the “5+4+N” strategy has been effective in boosting product sales in 2021, which in turn has facilitated overall revenue growth. In the future, the Group will increase its investment in brand development in order to fully vitalize its brands as well as drive development of its major products. The latter will involve steadily enhancing quality and controlling prices to boost sales volume, with the aim of bringing Dynasty’s superior wines to more consumers in China. Furthermore, in line with the industry development trend, Dynasty will strengthen its presence in the mass-market and mid-range product segments as well as target young consumers. In spite of the possible impact brought by sporadic COVID-19 cases in China, the Group is confident that its annual revenue will maintain a steady growth trend in 2022.”






Topic: Press release summary

VEGAN WINES AND SPIRITS SERVED HERE? TWO LATINAS ARE WORKING TOGETHER TO MAKE THIS A REALITY

Two Latin entrepreneurs, Jessica Contreras of Fuego Fino, Inc, and Frances Gonzalez of Vegan Wines, come together to make vegan wine and spirits more accessible to consumers.

“Plant-based and planet-friendly is a powerful combination, not to mention the fact that we are two Latin women who are finding ways to work and build with one another. This is a win-win for our respective communities — and for female-founded ventures as a whole. It shows that when we come together, we can bring opportunity and change to the market,” says CEO Jessica Contreras. 

AREN’T ALL WINES AND SPIRITS VEGAN?

No. The primary reason why wines and spirits are not vegan has to do with how producers clean up the product’s appearance, which usually involves the use of gelatins from animals, milk, and fish proteins. This process is known as “fining.” In most cases, producers use the animal-based proteins to act like magnets and attract the cloudy elements in young wines to more easily remove them. The most commonly used fining proteins are gelatin (animal protein), casein (a milk protein), albumin (egg whites), and isinglass (fish bladder protein). 

ABOUT FRANCES GONZALEZ OF  VEGAN WINES 

Frances is originally from New York, NY and is an experienced professional in the wine industry. As a vegan wine expert, she currently serves as President of Vegan Wines, a completely vegan-friendly wine club. Vegan Wines was founded in 2017 and focuses on providing members with information on the taste, style, quality, and region of each hand-picked wine, as well as the history and winemaking process as described by the vineyard owners and winemakers. Working with both Vegan Wines and Despacito Distributors has allowed Frances to gain nuanced expertise in the wine industry. She is also a member of the Women of the Vine & Spirits, where she assists in coordinating events that support an environment for female engagement in the wine business.

Frances also has extensive experience in the Vegan industry, having founded VegFest Puerto Rico, a festival that focuses on creating a community to enjoy a variety of vegan-friendly foods and products. She is also a Vegan Mentor at Catskill Animal Sanctuary and is the Vice President at Misfits Pet Orphanage. 

Vegan Wines Website: https://veganwines.com

ABOUT FUEGO FINO, INC.

Fuego Fino, Inc. is a planet-friendly wine and spirits company that focuses on developing the next high-growth product sector. They boost their revenue potential by curtailing waste and retaining the majority of their supply and distribution networks. For more information, please visit their website. 

Fuego Fino Website: https://fgfino.com