Tianwei Food's sausage seasoning sales are poor, with both performance and sales declining; after a "clearance-style" dividend distribution, they plan to go public in Hong Kong.

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A-shares’ “Number One Hot Pot Base” stock is once again flashing red on performance.

On March 12, Tianwei Food (603317.SH) released its annual report, showing that by 2025, the company achieved revenue of 3.449 billion yuan, a decrease of 0.79% year-over-year; net profit attributable to shareholders was 570 million yuan, down 8.79%; and non-recurring net profit was 508 million yuan, down 10.22%.

A deep dive into the annual report reveals that Tianwei Food’s performance slowdown is mainly due to declines in sausage and cured meat seasonings. However, the drop in performance hasn’t prevented the company from a “clear-out” dividend policy, with plans to distribute 5.5 yuan per 10 shares (same below), totaling 598 million yuan in dividends.

In fact, Tianwei Food is currently rushing to list on the Hong Kong Stock Exchange, aiming to build a new capital pathway. But considering its declining performance, this move to Hong Kong carries an urgent flavor.

Sausage and cured meat seasonings lead the decline

Tianwei Food specializes in the research, production, and sales of compound seasonings, including hot pot seasonings, recipe-style seasonings, sausage and cured meat seasonings, spicy sauces, and other over 100 varieties. According to Frost & Sullivan data, based on 2024 revenue, the company is the fourth-largest compound seasoning enterprise in China, and the fastest-growing among the top five (2022-2024). It is also China’s largest recipe-style seasoning and second-largest hot pot seasoning company, with market shares of 9.7% and 4.8%, respectively.

The annual report indicates that the performance decline in 2025 is not due to individual product fluctuations but results from collective pressure on core categories, with a significant decline in sausage and cured meat seasonings being the main drag; coupled with shrinking offline channels, the company’s performance has fallen back.

（Tianwei Food’s main product revenue, source: company announcement）

Data shows that in 2025, the company’s production and sales of sausage and cured meat seasonings were 11,049.95 tons and 11,066.53 tons, respectively, down 15.79% and 14.67% year-over-year; revenue from these was 280 million yuan, down 12.52%.

Behind these figures, there are dual changes in consumption scenarios and demand: on one hand, traditional peak seasons like Spring Festival see more rational household consumption, with pre-made and ready-to-eat foods diverting some demand from homemade sausage and cured meats; on the other hand, industry competition has intensified, with regional small brands adopting low-price strategies to capture market share. Tianwei Food’s pricing advantage in this category has not effectively translated into sales support.

Apart from sausage and cured meat seasonings, the other two major core categories also failed to grow, further amplifying performance pressure. Hot pot seasonings revenue was 1.229 billion yuan, a decline of 2.87%. As the largest category accounting for over 35%, its sluggish growth directly impacts overall revenue stability. Recipe-style seasonings revenue was 1.767 billion yuan, a slight decrease of 0.20%. Although the decline is small, as the largest revenue contributor (over 51%), its inability to generate positive growth is a performance drag.

The only category showing growth, “Other Products,” earned 159 million yuan, up 50.88%, but its small scale makes it difficult to offset the decline in core categories.

（Tianwei Food’s production and sales data, source: 2025 annual report）

Product weakness and offline channel contraction resonate: in 2025, offline channel revenue was 2.507 billion yuan, down 12.76%, while online channels grew rapidly by 56.91%, but only reached 936 million yuan, insufficient to offset offline declines. Although the number of distributors increased from 3,017 at the start of the year to 3,363 at year-end, this did not translate into actual operational data.

More critically, advertising, marketing expenses, and employee wages did not decrease, leading to an 8.67% increase in sales expenses to 490 million yuan, further impacting profitability.

Notably, net cash flow from operating activities in 2025 was only 588 million yuan, a decrease of 28.30% year-over-year.

“Clear-out” dividends and pushing for Hong Kong listing

Amid declining performance and cash flow, Tianwei Food announced a large dividend plan: based on a total share capital of 1.058 billion shares, it plans to distribute 0.55 yuan per share (tax included), totaling 582 million yuan—already exceeding the 2025 net profit of 570 million yuan. Including a share repurchase of 16.4455 million yuan, total dividends and buybacks for 2025 amount to 598 million yuan, accounting for 105.03% of net profit attributable to shareholders.

Since its listing, the company has maintained a tradition of annual dividends, and this “clear-out” dividend policy began in 2024. Data shows that in 2024, Tianwei Food paid out 585 million yuan in cash dividends, with a payout ratio of 93.58%.

It’s worth noting that the actual controllers of Tianwei Food are the couple Deng Wen and Tang Lu, holding a combined 67.31% of shares. This means most of the “clear-out” dividends over the past two years have gone into their pockets.

Behind these massive continuous dividends, Tianwei Food is fully pushing for a Hong Kong listing. In October 2025, the company officially submitted its listing application to HKEX. If successful, it will become a “A+H” dual-listed seasoning company. This move is seen by the market as a way to reverse the downward trend in performance, especially given the clear expansion path of the Deng Wen and Tang Lu family’s capital operations.

In 1993, Deng Wen became the legal representative of Tianwei Food Factory in Jinniu District. Six years later, the factory shut down due to poor management. In 2001, he restarted the business through Chengdu Tianwei Food, acquiring trademarks like “Good Man’s Home” and others, leveraging the market foundation of Tianwei Food, shifting from single seasoning products to compound seasonings, gradually forming three core series: recipe-style, hot pot, and sauces.

In 2012, Tianwei Food launched an IPO, after 7 years and 4 application attempts, finally listing on the A-share market in 2019. Post-listing, the company rapidly expanded through private placements, focusing on capacity and channel expansion. Currently, it has four production bases, with further capacity expansion possible.

Meanwhile, alongside capacity growth, Tianwei Food has also laid out upstream and downstream of the industry chain, acquiring Sichuan Shicui, Hangzhou Jiadian Flavor, Shandong Yipin Taste, and others, entering semi-solid seasonings, youth-oriented seasoning brands, and ready-to-eat sauces.

This IPO aims to raise funds for brand building, marketing, deepening sales networks, potential investments and acquisitions, digital operations, product R&D, and liquidity support.