Health and Happiness (H&H) International (1112) H1 2025 earnings summary

Executive summary

• Revenue increased by 4.9% year-over-year to RMB7,019.2 million for H1 2025, with growth across all business segments and strong performance in high-margin nutritional supplements, which contributed 65.6% of total revenue.

• Adjusted net profit rose 4.6% to RMB363.0 million, while reported net profit declined 76.8% to RMB71.0 million due to one-time finance costs.

• Mainland China led growth, accounting for over 70% of revenue, with notable gains in ANC, BNC, and PNC segments.

• Interim dividend of HKD0.19 per share declared, representing about 30% of adjusted net profit.

• Strategic focus on product innovation, premiumization, and global expansion, especially in China, Asia, and North America.

Financial highlights

• Gross profit increased 7.8% to RMB4,389.1 million, with gross margin improving to 62.5%.

• Adjusted EBITDA reached RMB1,100.7 million, down 3.4% year-over-year, with a margin of 15.7%.

• Operating cash flow was RMB998.0 million, and cash and equivalents stood at RMB1,812.0 million.

• Net profit dropped to RMB71.0 million, mainly due to non-cash and one-time finance costs from senior notes redemption.

• Inventory turnover days improved from 146 to 131, reflecting better sales and working capital management.

Outlook and guidance

• Continued top-line growth expected across all segments, led by high-margin supplements and pet nutrition.

• ANC segment to sustain momentum in China and expansion markets; BNC to accelerate IMF sales; PNC to maintain growth, especially in China and North America.

• Ongoing deleveraging, robust liquidity management, and capital structure optimization targeted for the full year.