‘Expectant Mothers Drinking Water’ helps drive Tianmei shares 22pc
Health & Biotech
Health & Biotech
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When the average drop of H20 just won’t cut it – bottled water manufacturer Tianmei is developing a range of “high-end” drinking waters, hoping to tap a growing Chinese thirst for exotic water.
Tianmei (ASX:TB8) already successfully markets a number of bottled water products in China — the world’s biggest bottled water market.
Demand for bottled water in China is driven by water shortages caused by pollution and limited natural water sources.
About a third of China’s lakes and rivers are unfit for human use and three-quarters of its water reservoirs are polluted at medium to high levels.
“While China encompasses almost 20 per cent of the world’s population, the country contains only 7 per cent of the world’s fresh water, leaving it with much less annual fresh water available per capita than most other countries,” the World Economic Forum reported last year.
Water shortages are expected to drive bottled water consumption in China to 49 million tonnes in the next three years, up from 19 million in 2019.
That presents a tremendous opportunity for companies like Tianmai.
Overall, Tianmei reported $19 million profit from $47 million sales in the half-year, leaving it with $40 million in the bank. Tianmei expected to spend about half that cash in the following quarter.
One of its fastest-growing lines is “infant water” that has “undergone a special physical treatment process so that the composition of trace elements in the water is suitable for infants”
Sales of infant water were up 805 per cent to 80,000 cartons in the half year to May.
The water seller also markets a “beauty spray” that “uses ultrasonic vibration technology to achieve strong atomisation of water so that the fine water droplets can be quickly absorbed by skin”.
Beauty spray sales were up 723 per cent to 41,395 in the same period.
Shares in Tianmei (ASX:TB8) jumped 22 per cent to 19.5c on Friday after company outlined a growth strategy focused on the development of new products for the Chinese market including “Expectant Mothers Drinking Water”.
“Tianmei is progressing its research and develop plans to create a natural mineral water product that contains a variety of minerals and trace elements that can help boost the immune system of pregnant women, as well as support the development and growth of their babies during pregnancy,” they said.
Tianmei also planned to enter the “high-end water market”.
Health-conscious Chinese were heavily focused on the mineral content of bottled water, the company said.
“Accordingly, Tianmei is accelerating its research and development investment to create a high-end drinking water product.
Based in Guangdong province, the group announced the construction of a new water plant in May, in order to keep up with the growing demand of China’s third largest city.
Shares have traded between 8c and 24.5c since the company listed on the ASX in February 2017.