Cheng De Lolo Co Ltd: Strategic Financial Moves and Market Challenges

In a recent series of interactions with investors, Cheng De Lolo Co Ltd, a prominent player in China’s food products sector, has provided insights into its financial strategies and market challenges. Listed on the Shenzhen Stock Exchange, the company, known for its almond juice, fruit juice, and fruit teas, has been navigating a complex financial landscape with strategic acumen.

Financial Strategy and Share Repurchase

On September 1, 2025, Cheng De Lolo addressed investor queries regarding its financial maneuvers, particularly concerning a significant increase in long-term loans. The company clarified that the additional 3.76 billion in long-term loans, primarily sourced from a policy-driven stock repurchase loan from the China Construction Bank, is utilized for share buybacks. This strategic move is underpinned by the loans’ lower interest rates compared to the company’s deposit rates, allowing Cheng De Lolo to optimize its financial management and enhance capital efficiency. This approach underscores the company’s commitment to leveraging favorable financial policies to bolster shareholder value.

Investment Safety and Liquidity

Amidst concerns about the safety of funds deposited with financial institutions, Cheng De Lolo reassured investors of the security and liquidity of its deposits. The company and its financial partner have not invested in any troubled trust products, ensuring that the capital remains secure and readily accessible. This response comes at a crucial time when the financial stability of major stakeholders is under scrutiny, highlighting Cheng De Lolo’s prudent financial management practices.

Dividend Policy and Shareholder Returns

Investors have raised questions regarding the company’s dividend policy, particularly in light of its substantial cash reserves. Cheng De Lolo explained that its dividend decisions are made by carefully balancing operational needs, growth plans, and shareholder returns. This strategic approach reflects the company’s commitment to sustainable growth and long-term value creation for its shareholders.

Market Challenges and Profitability

Despite a strong business model and significant cash reserves, Cheng De Lolo reported a decline in both revenue and net profit for the second quarter of 2025. The company attributed this downturn to decreased market demand and increased sales expenses due to new product launches and market expansions. Cheng De Lolo remains optimistic, focusing on capturing market opportunities and enhancing promotional activities to drive sales growth.

Looking Ahead

As Cheng De Lolo navigates these financial and market challenges, its strategic use of policy-driven financial instruments, commitment to investment safety, and focus on sustainable growth and shareholder value stand out. The company’s proactive approach to addressing investor concerns and adapting to market dynamics positions it well for future success in the competitive consumer staples sector.

For more detailed insights and updates, investors are encouraged to engage with the official exchange interaction platform.