Huabao International Holdings (336) H1 2026 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2026 rose 15.9% year-over-year to RMB1.88 billion, driven by strong growth in condiments (+29.9%), Huabao Technology (+20.4%), and aroma raw materials (+14.9%), while tobacco raw materials declined 16.4% due to geopolitical factors.

• Gross profit increased 8.8% to RMB766 million, with gross margin at 40.8% (down from 43.4%) due to intense competition and product mix changes.

• Operating profit rose 17.4% to RMB143 million; adjusted (Non-HKFRS) operating profit grew 19.2% to RMB232 million, reflecting improved profitability in core businesses.

• Net profit attributable to equity holders was RMB104 million, down 11.7% year-over-year, mainly due to lower finance income and reduced government grants.

• Interim dividend of HK1.2 cents and special dividend of HK4.08 cents per share declared.

Financial highlights

• Revenue: RMB1,878 million (+15.9% YoY); Gross profit: RMB766 million (+8.8% YoY); Gross margin: 40.8% (down from 43.4%).

• EBITDA: RMB323 million (+10.1% YoY); Adjusted EBITDA: RMB412 million (+12.5% YoY); EBITDA margin: 17.2%.

• Operating profit: RMB143 million (+17.4% YoY); Operating margin: 7.6%.

• Net profit: RMB124 million (+3.3% YoY); EPS: RMB3.23 cents (down from RMB3.66 cents).

• Net cash from operating activities: RMB93 million (down from RMB214 million YoY).

Outlook and guidance

• Management expects continued focus on internationalization, health industry, innovative tobacco, and high-potential customers.

• Strategic resource allocation will target high-growth areas, with clear growth pathways and ongoing execution of the three-year plan.

• Continued investment in R&D, digital transformation, and overseas capacity expansion.

• Management expects to maintain growth momentum and enhance core competitiveness through technology-driven innovation and lean management.

• No material adverse impact expected from project timeline adjustments; ongoing evaluation of unutilized fundraising proceeds.