Hengan International Group (1044) H1 2025 earnings summary

Executive summary

• Revenue for the first half of 2025 was RMB11.81 billion, nearly flat year-over-year, as tissue paper growth offset declines in hygiene products amid intensified competition and higher raw material costs.

• Gross profit margin declined to 32.3% from 33.3% due to increased promotional expenses and rising fluff pulp costs.

• Operating profit fell 7.3% to RMB1.76 billion, and profit attributable to shareholders decreased 2.6% to RMB1.37 billion.

• E-commerce and new retail sales rose 7.9% year-over-year, now comprising 34.4% of total revenue.

• Interim dividend per share maintained at RMB0.70.

Financial highlights

• Total revenue was RMB11.81 billion, down 0.2% year-over-year; gross profit at RMB3.81 billion, down 3.2%.

• Operating profit: RMB1.76 billion (down 7.3% year-over-year); profit attributable to shareholders: RMB1.37 billion (down 2.6%).

• Basic and diluted EPS: RMB1.206, down from RMB1.234 last year.

• Gross margin: 32.3% (down from 33.3%).

• Interim dividend: RMB0.70 per share.

Outlook and guidance

• Revenue expected to remain stable in 2H2025, supported by tissue paper sales and omni-channel strategies.

• Gross profit margin anticipated to improve with stable raw material prices and increased premium product sales.

• Focus on expanding premium product share, omni-channel sales, and digital transformation.

• Ongoing capacity expansion projects in Fujian, Chongqing, and Hubei to support future growth.

• Wood pulp prices expected to remain stable in 2H2025.