[ET Net News Agency, 10 July 2018] Moody's Investors Service has changed to positive
from stable the outlook on Health and Happiness (H&H) International Holdings Limited's
(01112) Ba2 corporate family rating and Ba3 senior unsecured rating.
At the same time, Moody's has affirmed the company's ratings.
"The positive ratings outlook reflects Moody's expectation that H&H will expand its
revenue scale and deleverage over the next 12-18 months," said Gerwin Ho, a Moody's Vice
President and Senior Credit Officer.
H&H has shown a good track record of revenue growth. Its revenue rose 24% year-on-year
in 2017 to RMB8.1 billion, driven by 22% year-on-year growth in revenue for baby nutrition
and care products, which include infant milk formula (IMF), probiotic supplements and
other pediatric products, and 27% year-on-year growth in adult nutrition and care
products, which consist mainly of vitamin, herbal and mineral supplements (VHMS).
H&H's revenue growth is supported by a favorable business environment in China (A1
stable). Its premium and new organic IMF products enjoy good demand in China where
consumers have a preference for quality products. Its probiotic supplements have also
registered strong growth, spurred by effective marketing, and its adult nutrition and care
products' growth is driven by rising consumer demand for Swisse Wellness Group Pty Ltd's
(Swisse) VHMS products.
Accordingly, Moody's expects that H&H's revenue will grow at about 17% year-on-year over
the next 12-18 months, reflecting growth in its baby nutrition and care products, as well
as adult nutrition and care products.
H&H has maintained its position as a leading domestic IMF provider in China. The company
ranked first among domestic IMF providers and sixth among domestic and foreign IMF
providers in 2017, according to Nielsen. (KL)