Hengan International Group (1044) H2 2025 earnings summary

Executive summary

• Revenue grew 1.8% year-over-year to RMB23.07bn, with net profit up 10.3% to RMB2.54bn and core business segments rising 1.9%.

• Gross profit margin improved to 33.8%, operating profit rose 3.9% to RMB3.48bn, and EPS increased to RMB2.227.

• Maintained a leading market position in tissue products, stable dividend payments, and strong net cash position.

• E-commerce and new retail channels grew 10.1%, now 36.9% of total sales.

• Final dividend of RMB0.70 per share proposed, with full-year payout at RMB1.40.

Financial highlights

• Core revenue (tissue and hygiene products) reached RMB20.7bn, up 1.9% from 2024.

• Gross profit increased 6.6% to RMB7.81bn; gross margin at 33.8%.

• Net profit attributable to shareholders: RMB2.54bn (up 10.3%); basic and diluted EPS: RMB2.227 (up 10.5%).

• Net cash position improved to RMB6.9bn; cash and bank balances plus long-term deposits: RMB22.63bn.

• Gearing ratio increased to 72.3% from 62.6% year-over-year.

Outlook and guidance

• Revenue is expected to remain stable in 2026, driven by premium product growth and omni-channel sales.

• Focus on premiumisation, omni-channel expansion, and prudent promotional spending.

• Plans to expand production capacity, upgrade technology, and accelerate digital transformation.

• Anticipates stable gross profit margin despite rising wood pulp prices.