Health and Happiness (H&H) International (1112) H2 2025 earnings summary

Executive summary

• Achieved 10.3% year-on-year revenue growth in 2025 to RMB 14,353.6 million, with all business segments and geographies contributing to growth.

• Adjusted net profit increased 22.7% to RMB 664.1 million, with adjusted EBITDA up 5% to RMB 2,050.5 million and strong cash conversion at 88%.

• Swisse surpassed HKD 1 billion/USD 1 billion in sales, becoming the number one VHMS brand in China and Australia.

• Dividend payout ratio maintained at 30%, with HKD 0.35 per share distributed.

• Net profit rebounded to RMB 196.1 million from a loss of RMB 53.7 million in 2024.

Financial highlights

• Revenue reached RMB 14,353.6 million, up 10.3% year-on-year; adjusted EBITDA margin at 14.3%, adjusted net profit margin at 4.6%.

• Gross profit increased 13.2% to RMB 8,963.7 million; gross margin improved to 63.1%.

• Net leverage ratio improved from 3.99x to 3.045x/3.45x; gross debt reduced by over RMB 600 million.

• Operating cash flow conversion at 88% of EBITDA; cash position at year-end was HKD 1.7 billion/RMB 1,709 million.

• Interest expense reduced to HKD 550 million; interest rate on debt down to 5.96%.

Outlook and guidance

• Confident in maintaining double-digit growth and further reducing leverage ratio to around 3x in 2026.

• Strategic focus on premiumization, innovation, and diversification across all segments, with continued investment in core brands and channel expansion.

• Continued localisation of pet supply in China and expansion of Zesty Paws into new markets.

• SG&A ratio expected to remain stable in 2026, with ongoing investment in new channels and products.

• Ongoing deleveraging and liquidity optimisation to support long-term growth.