Huabao International Holdings (336) H1 2025 earnings summary

Executive summary

• Revenue for 1H 2025 rose 2.5% year-over-year to RMB 1,621 million, driven by strong growth in tobacco and aroma raw materials, offset by declines in F&F and food ingredients.

• Operating profit increased 21.8% to RMB 122 million, with profit attributable to equity holders surging 298.1% to RMB 118 million, mainly due to the absence of prior-year impairment losses.

• Gross profit margin declined to 43.4% from 44.8% year-over-year due to intensified competition and product mix changes.

• Interim and special dividends per share were HKD 1.2 cents and HKD 3.2 cents, respectively.

Financial highlights

• Adjusted operating profit (excluding share-based compensation and impairments) rose to RMB 195 million, up 0.3% year-over-year; adjusted profit for the period was RMB 194 million, up 2.1%.

• Basic and diluted EPS grew to RMB 3.66 cents from RMB 0.92 cents year-over-year.

• Adjusted EBITDA margin was 22.6%; EBITDA increased 12.1% to RMB 294 million.

• Net cash generated from operating activities rose 88.6% to RMB 214 million.

• Net current assets stood at RMB 6.91 billion, with cash and bank balances of RMB 4.5 billion as of June 30, 2025.

Outlook and guidance

• Management maintains a cautious outlook for H2 2025 due to weak domestic consumption, fierce competition, and overseas tariff uncertainties.

• Strategic focus on R&D innovation, AI-driven transformation, international expansion, supply chain enhancement, and lean production.

• Plans to increase investment in natural flavours, expand tobacco and aroma raw materials overseas, and broaden condiment product categories.