The Singapore Exchange (SGX) queried Sino Grandness Food Industry Group after shares of the Chinese canned fruit and vegetable supplier tumbled nearly 24 per cent at one point yesterday.
The company responded to SGX after market close, saying it could not explain the trading activity.
Its stock plunged 23.8 per cent or five cents to 16 cents during trade yesterday before recovering to close at 18.3 cents, down 12.9 per cent or 2.7 cents, with about 8.3 million shares changing hands.
The mainboard-listed group reported last Friday that second-quarter earnings fell 33.4 per cent to 105.1 million yuan (S$21.5 million), compared with 157.7 million yuan a year ago, due to weaker demand for its beverages and canned products.
Revenue slipped 16.7 per cent to 939.9 million yuan for the three months to June 30.
First-half net profit slumped nearly 70 per cent to 157.8 million yuan, while revenue slipped 15 per cent to 1.58 billion yuan.
Sales of overseas canned products fell 6.3 per cent in the first half of the year, while sales of Garden Fresh juices dropped by 18.4 per cent. Domestic canned products sales dipped 5.8 per cent to 201 million yuan in the first half.
Distribution and selling expenses rose 1.8 per cent in the first half to 285.9 million yuan from a year ago. This was mainly due to lower transportation costs partially offsetting higher costs from advertising and promotion activities of its beverage products.
Administrative expenses fell 40.3 per cent to 55.6 million yuan in the first half, partly due to smaller foreign exchange losses and lower listing-related professional expenses.
Chairman and chief executive Huang Yupeng said yesterday: "The group's gross profit margins were also affected by higher raw material costs for canned products and a change in product mix for the beverage segment, with higher contribution from the Qingrun series of beverages which commanded lower profit margin."
But he noted that the company had a stronger balance sheet due to higher net cash from operations and the completion of a rights issue in the first half.
"This significantly improved our cash balance to 699 million yuan as at June 30, compared with 297.7 million yuan as at Dec 31, 2016," he said.
"In the long run, I remain optimistic about the growth potential of the consumer market in China due to its huge population base and rising disposable income."
