Economic Developments - The Hainan Free Trade Port (FTP) has maintained smooth operations and achieved initial economic aggregation one month into special customs operations [1] - A total of 5,132 new foreign trade enterprises registered in Hainan over the past month, bringing the total number of registered foreign trade market entities in Hainan to over 100,000 [7] Company Benefits - Hainan Heren Pearl Co., Ltd. benefits from the FTP policies, reducing its overall tax burden from approximately 52% to about 26% by selling high-value products duty-free to the mainland [3] - Chia Tai (Hainan) Xinglong Coffee Industry Development Co., Ltd. operates at full capacity, importing green coffee beans from Colombia and enjoying an 8% tariff reduction under FTP policies [4] Customs Policies - The FTP features "freer access at the first line" for trade between Hainan and areas outside China's customs borders, and "regulated access at the second line" for goods moving from Hainan to the mainland [5] - From December 18, 2025, to January 18, 2026, the value of "first line" imported zero-tariff goods was 753 million yuan (approximately 107 million U.S. dollars), while processed goods sold domestically through the "second line" amounted to about 85.9 million yuan [6] Global Context - The launch of island-wide special customs operations occurs amid rising global uncertainty and deglobalization, reflecting China's commitment to high-standard opening up [8] - This initiative is expected to inject greater certainty and positive momentum into the global economy and international trade cooperation [9]

Financial Data and Key Metrics Changes - The company achieved a turnover of INR 1,058 crores for Q1 FY '26, a growth of 37% compared to INR 774.6 crores in the same quarter last year, marking the first time the company surpassed INR 1,000 crores in a quarter [4] - EBITDA increased to INR 161.43 crores, up 23% from INR 131.62 crores, while PBT grew by 8% to INR 131.62 crores, and net profit rose by 1% to INR 72.45 crores [4] - The increase in PBT was impacted by higher interest and depreciation costs [4] Business Line Data and Key Metrics Changes - The domestic market for branded products generated approximately INR 150 crores in the first quarter, with nearly INR 100 crores coming from brand and retail business [5] - The company continues to gain market share across various channels and geographies due to aggressive growth strategies [5] Market Data and Key Metrics Changes - Green coffee prices have softened by 20% to 30% in the last two to three months, although volatility remains high [5] - The period between the end of the Brazil crop and the start of the Vietnam crop in December is seen as critical for price stabilization [6] Company Strategy and Development Direction - The company aims to maintain a volume growth guidance of 15% to 20% year-on-year, focusing on EBITDA growth in line with volume increases [13] - The management is optimistic about leveraging the tariff situation, particularly with Brazil's 50% tariff, which may reroute coffee to India and Vietnam for processing [15] - The company is expanding its branded business, particularly in the UK and India, with plans to build brand awareness and capture premium segments [36][39] Management's Comments on Operating Environment and Future Outlook - Management noted that the current market environment is characterized by price volatility, which affects buyer commitment to long-term contracts [20] - The management expressed confidence in maintaining or surpassing volume growth in the upcoming quarters, despite recent price fluctuations [52] Other Important Information - The company reported a net debt of INR 1,671 crores, down from INR 1,812 crores as of March 31 [28] - Depreciation costs are at peak levels due to the commissioning of new units, and interest costs are expected to decrease as working capital requirements lower [25][26] Q&A Session Summary Question: What is the stable number to look at for EBITDA margins given the volatility? - Management advised that the right way to gauge performance is to focus on EBITDA growth numbers rather than margins, which can fluctuate due to coffee price changes [12] Question: Will Brazil's tariff impact coffee sourcing to India and Vietnam? - Management confirmed that there is a possibility of coffee being rerouted to India and Vietnam due to the high tariff on Brazilian coffee, providing a competitive advantage [15] Question: What is the outlook for coffee prices and inventory? - Management indicated that stable prices are crucial for long-term contracts, and the current volatility is causing buyers to be tentative [20] Question: What are the capacity utilization levels for new units? - The company reported that existing capacity is running at full capacity, while new capacity utilization is around 10% to 15% [34] Question: What is the geographical revenue split? - Approximately 10% of exports come from the American markets, 35-40% from European markets, and the remaining from Asian markets [120]