H&H国际控股（1112.HK）2025年度中期业绩发布会
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会议摘要
Jianhe Group's performance report for the first half of 2025 shows steady financial growth and proactive adjustment of market strategies. The core business includes adult nutrition, infant and toddler nutrition, and pet nutrition, achieving a year-on-year sales revenue growth of 4.9%, while the adjusted comparable profit margin maintains around 15% and the net profit margin is expected to reach 5.2%. Through product innovation and optimization of market strategies, the gross profit margin has improved, marketing and management expenses have been optimized, inventory turnover days have been significantly shortened, cash balance exceeds 1.8 billion RMB, and total liabilities have decreased. The outlook for the second half of the year shows that sales revenue is expected to achieve high single-digit growth, net profit margin approaching 5%, BNC sector growth accelerating, PNC sector maintaining a mid-single-digit profit margin, and optimization of market strategies in the Australia-New Zealand market to deal with the decline in direct sales channels. The company demonstrates a commitment to health and sustainable growth, as well as confidence in future development.
会议速览
Jianhe Group's financial report for the first half of 2025: Growth driven by nutritional supplements, multi-market layout showing effectiveness.The meeting reviewed the financial performance of Jianhe Group in the first half of 2025, focusing on the growth of the nutritional supplements business, especially in the strong performance in the Chinese market. The Group achieved healthy profitability and double-digit growth by focusing on core markets, optimizing product portfolio, and exploring new markets. In addition, the Group completed a $300 million bond issuance, optimized its capital structure, and plans to distribute dividends to reward shareholders. Looking ahead, the Group will continue to strive to achieve annual targets, especially expecting more contributions from PNC and new markets.
First half performance report of 2025: Innovation leading growth, three major sectors advancing simultaneously.In the first half of 2025, the group's revenue exceeded 7 billion RMB, with a 4.9% growth rate. All three major business segments achieved positive growth. Nutrition products are the core, accounting for 65.6%, with steady growth in adult nutrition products and a 15.5% growth in pet nutrition products. China's revenue accounts for 70%, with stable growth in the North American market, and unit growth in the Australia and New Zealand local market, expanding the market with a year-on-year growth of 18.8%. ANC, BNC, and PNC grew by 5.9%, 2.9%, and 8.6% respectively, laying a foundation for continued development in the second half of the year and in the future.
The diversification of the group's market and brand layout has achieved remarkable results.The group has consolidated its core markets and significantly expanded its market revenue through diversified market and brand layouts. The market share of ANC and BNC segments has exceeded 7%. China and North America are the primary markets, with healthy profit margins for ANC and BNC. The high-end transformation and channel strategy of PNC have improved profit stability. The Swiss Chinese brand strategy has been successful, leading growth in cross-border e-commerce and improving new retail channels. Subsidiary brands drive innovation and consumer education, with significant overall strategic achievements including completing the integration of Yin.
Analysis and strategic outlook on the growth of the baby formula and nutrition business in the first half of 2025.In the first half of 2025, the infant formula business achieved a 10% year-on-year growth, with a market share of 15.9% in the high-end segment. The Health&Care brand performed well in e-commerce and mother-baby channels, and the probiotics business is expected to return to positive growth. The PNC business in China resumed double-digit growth, and pet fish oil products quickly entered the top ten in the market. The proportion of local business in the Australian and New Zealand market reached nearly 70%, achieving high single-digit growth, with the switch brand becoming the top VMS brand. The North American market is growing at 4.6%, jc port business achieved double-digit growth, soly go sector completed structural adjustments, high-end products increased in proportion, and offline distribution continued to expand.
Global market expansion and sustainable development achievements of the group in the first half of 2025.In the first half of 2025, the group showed strong growth in the Asian market, especially in Hong Kong, Thailand, Malaysia, and other regions, while maintaining stability in Europe. Continuing to focus on high-end nutritional health products, promoting sustainable development strategies, and receiving multiple environmental awards. In the future, we will deepen our market strategy in China, innovate products, strengthen our omnichannel layout, and ensure global health growth.
Highlights of financial performance and outlook for the first half of 2023 and full year.In the first half of the year, sales revenue increased by 4.9%, adjusted comparable net profit margin improved by 4.6%, and gross margin increased by 1.4 percentage points. By successfully refinancing bonds and optimizing financial costs through currency hedging strategies, it is expected to maintain high-single-digit sales revenue growth and a comparable adjusted net profit margin of around 15% for the full year.
The company's financial performance in the first half of the year is impressive: abundant cash reserves and a decrease in debt ratio.In the first half of the year, the company achieved a cash balance of over 1.8 billion RMB, with total liabilities decreasing by 150 million RMB. It is expected that the annual debt ratio will further decrease to 3.7 to 3.8 times. The actual interest rate has decreased to 6.63%, and is expected to further decrease to close to 6% annually. The company maintains a healthy adjusted beta profit margin of approximately 15%, an adjusted net profit margin close to 5%, and has excellent financial performance to support stable business growth.
Management reiterates annual performance guidance, and provides detailed forecasts for growth in three major sectors.The management reiterated the annual performance guidance during the live broadcast, expecting the group's sales revenue to achieve high single-digit growth, with the adjusted gross profit margin maintained at 15% and the adjusted net profit margin close to 5%. The ANC sector is expected to achieve mid to high single-digit growth, the BNC sector's infant formula business grew by nearly 10% in the first half of the year and is expected to accelerate to low double-digit growth for the whole year. The infant and child probiotic sector remained flat compared to last year, with the overall EPW rate increasing to low double digits. Nasty Post's annual sales revenue is expected to grow by 12%-15%, SONY Go business is returning to low single-digit growth, and the APR profit margin in the PNC sector is maintained at a mid-single-digit level.
Analysis of PNC growth drivers and BNC profitability improvement strategies.The key factors discussed for the business growth of PNC are product innovation and consumer penetration, while maintaining the unchanged medium and long-term growth and profit targets. As for the BNC segment, in the first half of the year, the gross profit margin was affected by some products. Now, 80% of the product series has been adjusted to resume expected growth. The plan is to enhance overall profitability by optimizing product mix, focusing on driving growth in online and maternal and child channels through the synergy of new and old products.
Analysis of Global Market Expansion and Growth Potential of PNC: Dual-wheel Drive of North American Pet Nutrition Products and Chinese MarketThe dialogue discussed the business situation of PNC in the North American and Chinese markets, pointing out that the penetration rate of the pet nutrition market in North America is low, with room for growth, and the company is expanding from online to offline channels. In the Chinese market, double-digit growth is achieved through brand acquisitions, with low penetration rates and enormous potential in the pet market. In addition, PNC is also expanding into the European and Asian markets, expecting to drive overall business growth.
The relationship between the decrease in ANC profit margin in China and the increase in the proportion of sales through the Douyin channel, as well as future trends.The main reason for the decrease in the profit margin of Chinese ANC from 21% to 19% was discussed, which is the increase in the sales proportion through the Douyin channel. The analysis points out that Douyin has become the largest sales engine for nutritional health products, and the Swiss brand has adapted to the changes in the e-commerce environment by laying out multiple channels. It is expected that by the first half of 2025, the channel structure will trend towards an ideal state, which will help attract new consumers and maintain sustainable profitability. The global ANC sector will also continue to improve its profitability, with the goal of maintaining it at 20%, ensuring that ANC remains a sustainable source of revenue and profit for the group.
Improved efficiency in Douyin operation and growth in new retail are driving overall business improvement.Discussed the improvement of Douyin's business operation efficiency, including the decrease in advertising costs and the reduction in collaboration fees with KOLs, as well as the rapid growth of the new retail sector by 28% in the first half of the year, accounting for 9% of the overall business, demonstrating good profitability. Emphasized the artistic effect of Douyin and the omni-channel growth strategy, indicating that despite facing growth and cost pressures, brand overall enhancement can be achieved through efficiency improvements and consumer-oriented strategy adjustments.
Decline in income in the Australia and New Zealand region: Local market growth strategy and full-year expectations stableIn the conversation, it was mentioned that income in the Australia and New Zealand region has declined due to adjustments in the daigou channel, but local performance has significantly increased. Future strategies will focus on the local market to compensate for the decline in daigou, with the goal of maintaining stability throughout the year.
要点回答
Q：In the first half of 2025, how did the company achieve overall growth despite facing fierce market competition and challenges such as declining birth rates? How did the ANC sector perform in the Chinese market in the first half of 2025?
A：The company has achieved significant growth by focusing on the nutritional supplement business, especially in the areas of infant, adult, and pet nutrition, driven by the health demands after the epidemic. From 2021 to 2023, the group achieved a compound growth rate of 9.8%, and the nutritional supplement business accounted for 65% of the entire group's business in 2025, becoming the main engine of future growth. The ANC sector achieved 13% growth in the Chinese market, successfully reaching its target. This achievement is due to the optimization of product and brand portfolio, such as the CS Plus anti-aging series leading in the ND and Ma Jiao categories, and the structural product layout of Little Swiss in the Chinese market, giving this sector good growth prospects in the Chinese market.
Q：How is the performance of Switch business and global expansion in the Australian and New Zealand markets?
A：The Switch business in the Chinese market has contributed to 70% of its business volume, and achieved nearly 40% growth by focusing on emerging markets such as Asia, the Middle East, and other European countries. Currently, the new markets have started to become profitable.
Q：What strategies did the BNC sector adopt in the face of declining birth rates, and how did it perform in the first half of 2025?
A：Faced with declining birth rates, the management team has formulated a strategy focusing on high-end to operational end, allowing the BNC sector's market share to increase from 12.9% to 15.9% in the first half of 2025. The milk powder business achieved a 10% growth. Despite a 16% decline in business due to the impact of the waist channel on the probiotics track, the business in the mother and baby channels and online channels has returned to normal levels.
Q：What is the growth situation and future expectations of the PNC sector on a global scale?
A：The PNC sector has experienced a 14.3% growth globally, with pet nutritional supplements showing a 17.5% growth in the Chinese market. Expansion is also seen in markets outside of the United States, such as in Europe and Asian countries. It is expected that the PNC sector will continue to be the main driver of growth for the group in the future.
Q：In terms of capital structure, what new developments does the company have and what is the feedback plan for shareholders?
A：The company successfully issued $300 million in bonds at the beginning of this year and plans to distribute a dividend of HK$0.19 per share in the first half of the year to thank shareholders for their support. At the same time, the company is committed to optimizing its capital structure, increasing the proportion of RMB, reflecting the company's good cash flow management and emphasis on shareholder value.
Q：How is the group's revenue situation in the first half of 2025? What is the profit situation and growth of the group in the first half of 2025?
A：In the first half of 2025, the group achieved revenue of over 7 billion RMB, with a growth of 4.9%. In terms of profit margin, the group maintained a healthy EBITDA margin of 15.7%, with overall cash flow of 1.1 billion RMB. Adjusted net profit was 360 million, an increase of 4.6%. Through improved operating capital efficiency, strong cash flow conversion rate was achieved, with pre-tax operating cash flow reaching 100%.
Q：How is the performance of the various business segments of the group?
A：In all major business segments, positive growth has been achieved. As the core business, the nutritional products accounted for 65.6% in the first half of 2025, with a positive growth of 4.9%. After the adjustment of the new national standards, the powdered milk business also achieved a growth of 9.96%.
Q：How is the specific situation within the nutrition sector?
A：The adult nutritional products segment continues to grow steadily, accounting for 74.2% of the market. Pet nutritional products have increased by 15.5%, while the infant probiotics and nutritional supplements segment has declined by 16% due to structural adjustments. However, with new product launches and focused investments, it has recovered to single-digit growth. Currently, this segment accounts for less than 10% of the market.
Q：From a regional perspective, how is the performance of each region in the group?
A：China remains the most important region for the group, accounting for 70% of revenue, with growth mainly driven by the recovery of infant formula and high growth from Swiss and Suerie. The North American market grew by 4.6%, becoming the second source of revenue for the group; the Australia and New Zealand market declined by 15.6% due to a decrease in purchasing channels, but maintained single-digit steady growth in the local market. The revenue from emerging markets accounts for 6% of the group's revenue, growing by 18.8% year-on-year, becoming a new growth engine.
Q：How is the overall performance and growth of the three major business segments (ANC, BNC, PNC) of the group?
A：In the first half of the year, all three major business segments showed positive growth, with ANC growing by 5.9%, BNC growing by 2.9%, and PNC growing by 8.6%. Overall performance has returned to a relatively healthy growth trajectory.
Q：After being divided by region and business unit, what is the profit margin situation for each business segment?
A：Although the profit margin of the ANC segment has slightly decreased, the EB in different regions such as Aoxin District and the expansion market has increased; PNC segment has increased its profit margin from 5.1% to 6.7% through product and channel upscale strategies; While the ANC segment has been affected by changes in the Chinese market channel, it still maintains a healthy margin of over 20%.
Q：How is Swiss's online and omnichannel sales performance this year?
A：This year, Swiss has achieved significant growth in online channels such as Douyin, and we have risen to fourth place in the nutritional supplements category on Douyin channel. In addition, the new retail o to o channel has also achieved a 28.2% growth, currently accounting for 9% of Swiss's total sales in China.
Q：swiss旗下的小小思维斯little swiss表现怎样？
A：Little Swiss led the growth of Swiss in China, with a growth rate of 32.9% in the first half of the year. The Swiss Pass series, which focuses on cellular nutrition, led the growth of the anti-aging series, with a growth rate as high as 30%.
Q：How is the performance of the Beingmate formula milk business in the first half of 2025?
A：In the first half of 2025, the Wyeth infant formula business returned to a growth trajectory, with a 10% year-on-year growth in infant formula, and the market share of ultra-high-end products increased to a historical high of 15.9%. Both first-tier and second-tier products maintained high double-digit growth.
Q：How is the situation of the probiotics sector of H&H Group?
A：Despite a slight decline in the overall sector, we are confident that with the launch of new products and the positive performance of e-commerce and mother-baby channels, we will be able to recover and stabilize the growth of the probiotic sector of H&H and return to a positive development in the second half of the year, solidifying our position as the top in the country.
Q：How is the performance of PNC business in the China region in the first half of 2025?
A：In the first half of 2025, the PNC business in China achieved double-digit growth, reaching 17.5%, mainly thanks to product innovation such as the launch of high-margin cat food and new categories of nutritional supplements, as well as the rapid entry of high-speed fish oil into the top ten in the market.
Q：How is the revenue composition and performance of the Australia-New Zealand segment?
A：In the Australia-New Zealand region, local Australian businesses account for nearly 70% of the market share, showing high double-digit growth in unit numbers, successfully consolidating their position in the Australian nutrition market. In the first half of 2025, Switch has become the number one VMS brand across all channels in Australia, with sales channels in the local Australian market growing by as much as 14.8%, exceeding the industry average.
Q：How is the situation in the North American market? How are the business performance and progress in sustainable development in the European market?
A：In the North American market overall, there was a positive growth of 4.6%, with JC Port experiencing a high double-digit growth of 12.8%, benefiting from its leading position in Amazon and Chubi, as well as expanding offline distribution. The development of these two channels together drove sustained triple-digit growth. In the European market, Swiss holds the second position in the Italian beauty and nutrition market, Haili Yuan maintains the first position in organic milk powder and goat milk categories in French pharmacies, and Tasty Ports successfully entered the EU and UK markets. Overall, the expansion regions of Asia and Europe have both maintained expected growth and structural adjustments. In terms of sustainable development, the group continues to optimize its product portfolio, create an inclusive work environment, and consolidate its leadership position in sustainable development, receiving high praise from multiple environmental rating agencies.
Q：How did the performance of the Soly Go sector change after adjustments?
A：After switching from covering individual stores in the past to focusing on online channels and high-profit pet store channels, the decline in sales has narrowed. The structural adjustment in the North American region has been completed, with high-end products accounting for nearly 25% of sales. It is expected that with the continuous expansion of offline distribution, a clear and stable growth will be achieved.
Q：How is the business growth situation in the Asia expansion region?
A：The Swiss brand in the expanding Asian region showed strong growth in the first half of 2025, with revenue increasing by a significant 71.7% year-on-year. Among them, the markets of Hong Kong, Thailand, Malaysia, India, and the Middle East performed outstandingly, laying a solid foundation for future growth.
Q：What are the focus strategies and goals of the company in the ANC segment? What are the main development plans for the BNC segment?
A：In the ANC sector, we will continue to focus on the mainland China market, persist in launching innovative products, and conduct consumer education for new product categories to more accurately meet the needs of different consumers, solidifying our leading position in all channels. At the same time, in the entire Aoxin market, we will firmly promote innovation and high-end strategies, as well as channel expansion, to consolidate our leadership position in the local market. In emerging markets such as Asia and Europe, we will drive sustained strong growth and see a steady increase in profitability. In the BNC sector, we will continue to drive the growth of the infant formula business in the Chinese market, focusing on educating new mothers and transitioning through different stages of infant formula to solidify our position in the ultra-high-end infant formula market. In addition, we will actively achieve stronger growth of the products launched in the first half of the year in the mother and baby channels and online markets.
Q：What is the strategy of the PNC sector in the North American market?
A：In the North American market, the PNC sector will adhere to a multi-channel strategy and continuous innovation strategy, maintaining its leadership position in c port, with particular focus on the development of high-end pet food and nutritional products. We will adjust the profitability of the North American Soly Go business in e-commerce and retail channel coverage, while the transformation of the Chinese Soly Go business will continue the growth trend from the first half of the year. At the same time, we will drive the performance growth and profitability of the PNC sector with high-margin pet food and nutritional products.
Q：What are the management's expectations for the overall business performance of the company?
A：The management expects the company's sales revenue to achieve close to high single-digit growth throughout the year, which is in line with the trend of sustained high single-digit growth from 2021 to 2023 mentioned earlier. In terms of adjusted comparable profit margin, we have maintained a very healthy advantage. Although there was a gap in the first half of this year compared to the same period last year, with the majority of new national standards investment occurring in the second half of the year, we achieved a profit margin of 15.7% in the first half of this year and are confident in maintaining an adjusted comparable net profit margin of about 15% for the whole year.
Q：What are the differences between net profit based on financial report criteria and adjusted comparable net profit, and what are the main reasons for these differences?
A：There is a gap of 290 million between the net profit based on financial report and the adjusted comparable net profit, which is mainly composed of two parts. Firstly, earlier this year we successfully completed a $300 million bond refinancing, replacing the old high-interest bonds with new bonds at a lower interest rate, resulting in a one-time expense of 2.2 billion. However, this will save financial expenses and increase net profit over the next three to five years. Secondly, there was a loss of 65 to 68.5 million due to changes in the fair value of derivative products, which was caused by exchange rate fluctuations, but this loss has been largely offset as the market exchange rate returns. Despite this, we have protected against exchange rate risks and optimized the company's financial expenses through forex hedging.
Q：How did the gross profit margin change and the performance of core categories in the first half of the year?
A：In the first half of this year, we are pleased to see that the company's gross profit margin has increased by 1.4 percentage points. Both the gross profit margins of the adult nutrition and pet nutrition core categories have seen improvements, mainly due to the overall product mix and channel mix improvements as well as optimized procurement costs. For the milk powder category, the gross profit margin slightly decreased to 55% in the first half of the year, but with the reduction of impairment provisions for non-core milk powder categories, it is expected that the full-year milk powder gross profit margin will rise to 57%. The pet food category, on the other hand, saw its gross profit margin increase to over 40% due to product structure optimization and lower procurement costs.
Q：What are the performance and reasons for the marketing expenses in the first half of the year?
A：In the first half of the year, our marketing expenses increased slightly to 41%, and there were two main reasons for this: first, the contribution of ANC China's Douyin platform increased, leading to changes in channel contribution; second, necessary investments were made to support the development of emerging markets in the ANC and PNC sectors. For the BNC sector, with the completion of the switch to the new national standard for infant formula and an increased growth rate, economies of scale have appeared, resulting in an optimization of marketing expenses as a proportion.
Q：Has the performance for the whole year been updated?
A：We reiterate the guidance we previously provided to the market. The group is expected to achieve high single-digit sales revenue growth for the full year, with adjusted gross margin maintained at around 15% and adjusted net profit margin expected to be close to 5%. Looking at specific segments, ANC's full-year growth is expected to be in the mid to high single digits, maintaining a healthy maximum margin of around 20%; BNC's infant formula business is expected to grow by nearly 10% in the first half of the year, with full-year growth projected to be in the low double digits, while infant and child probiotics will remain steady for the entire year, with the overall BNC EPW margin gradually increasing to a low double-digit level. The editorial department expects a 12% to 15% increase in sales revenue for the year for nasty post, while the overall SONY go is expected to return to a low single-digit growth level for the full year, and PNC's overall APR profit margin will be maintained at a mid-single digit level.
Q：In the case of PNC, can you provide more details on the growth points in the North American and Chinese markets? Especially in terms of market penetration for pet nutrition products?
A：Of course, PNC primarily relies on pet nutrition products to drive growth in the US market, although the current market penetration rate is still relatively low compared to other categories. By expanding sales channels, from online acquisitions to offline expansions in retail stores such as Walmart and some CBS pharmacies, we have created further growth opportunities in the US market. In the Chinese market, we see huge growth potential due to the low penetration rate of pet nutrition products, and have achieved high double-digit growth after acquiring brands. In addition, we have expanded to European (such as the UK) and Asian markets, which will also drive overall business growth.
Q：The increase in sales through Douyin channel has led to a decrease in China's ANC profit margin from 21% to 19%. How does the management view the sustainability of this trend?
A：This is an issue that we pay close attention to. In the past few years, there have been structural changes in the Chinese e-commerce environment and offline formats, with Douyin becoming the largest engine for health and nutritional supplements. As a leading brand, our multi-channel layout helps educate consumers about new product categories, and we will adjust our channel structure in the first half of 2025 to make it more ideal, in order to better reach new consumer groups and maintain sustainable profitability. Therefore, we will continue with this channel composition to expand Switch revenue and achieve a more sustainable profitability status. At the same time, in the global ANC sector, we will continue to increase profitability to ensure it remains at the global 20% level, in order to support ANC as a sustainable growth driver for the group's important revenue and profit sector.
Q：Regarding the operation strategy of Douyin, what is the company's plan? Has the profitability of Douyin business improved?
A：Our strategy is to maintain our ranking on Douyin in the top five, rather than blindly chasing for faster growth, because further improvement requires bigger investment. As we operate on Douyin, our own profitability has indeed improved, such as a decrease in advertising rates. This is because we had no basis for comparison when we were not participating before, but now we can reduce costs when working with KOLs. Our goal is to improve the efficiency of investment returns on our Douyin channel.
Q：How is the performance of the new retail sector? What impact does TikTok have on overall sales?
A：The new retail sector grew rapidly in the first half of the year, reaching 28%, and the proportion of new retail business has reached 9%. Douyin not only drove the growth of the new retail sector, but also helped improve brand image through its artistic effects. Although facing pressure from growth and investment costs, in the long run, the efficiency of Douyin is improving, and this artistic effect also helps in shaping the brand.
Q：What are the company's expectations and improvement measures for the double-digit decrease in revenue in the AMC Australia and New Zealand region in the first half of the year?
A：Australia and New Zealand's domestic business accounts for nearly 70% of our revenue, so we will further drive the growth of Australia and New Zealand's domestic performance. The decline in the first half of the year was mainly due to adjustments in the company's purchasing channels, while Australia's domestic performance achieved high single-digit growth. In the future, we will continue the strategy of the first half of the year, increase our efforts to develop the Australia and New Zealand domestic market, in order to offset the impact of the decline in the company's purchasing channels and maintain the stability of the full year forecast.
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