Haitian Flavouring and Food Industry 2025 Annual Report Review

Source: Yi Liu Investment Research Notes

Disclaimer: This article is for research and discussion purposes only and does not constitute any investment advice. The stock market carries risks; decisions should be made independently. Build your own logical framework and risk control system, and avoid following the crowd blindly.

Today, Haitan Flavor Industry also released its 2025 annual report. I’ll first let the intelligent platform generate a summary—very fast, so I don’t have to read the financial report manually. The same as before, I used Python to parse the PDF into a TXT file because Deer-flow’s model has limited token capacity. This time, I used a different method, then manually checked the entire text (to prevent it from adding random content), verifying each part individually. I added some content (dividends section), and adjusted the formatting.

1. Financial Summary: Steady Revenue Growth and Continuous Profitability Improvement

In 2025, the company achieved operating revenue of 28.873 billion yuan, up 7.32% year-over-year, setting a new record. Among them, main business revenue was 27.399 billion yuan, up 9.04%, with a steady growth trend. Net profit attributable to shareholders reached 7.038 billion yuan, up 10.95%, with a growth rate exceeding revenue growth, indicating the company’s excellent profit improvement. Non-recurring net profit attributable to shareholders was 6.845 billion yuan, up 12.81%, reflecting ongoing enhancement in core business profitability.

The company’s overall net profit margin was 24.40%, an increase of 0.78 percentage points year-over-year, showing steady strengthening of profitability. Net cash flow from operating activities was 7.746 billion yuan, up 13.24%, indicating healthy cash flow and ample funds for sustained development. R&D investment was 915 million yuan, accounting for 3.17% of operating revenue, demonstrating ongoing commitment to technological innovation. Notably, the company successfully listed on the Hong Kong Stock Exchange in June 2025, forming a dual-platform structure of A+H shares, opening new opportunities for international expansion.

The annual dividend per share is planned at 0.8 yuan, plus an interim dividend of 0.26 yuan per share, and a special dividend of 0.30 yuan in January. Total dividends for 2025 amount to 1.36 yuan per share. Based on the latest stock price of 36.95 yuan (as of March 26, 2025), the dividend yield is approximately 3.68%.

2. Business Structure: Core Categories Remain Steady, Diversified Layout Emerges

The company has built a three-dimensional product matrix centered on soy sauce, oyster sauce, and seasoning sauces, with these three core categories performing steadily. In 2025, soy sauce revenue was 14.934 billion yuan, up 8.55%, with a gross margin of 48.73%, an increase of 4.03 percentage points year-over-year, maintaining the top position nationwide. Oyster sauce revenue was 4.868 billion yuan, up 5.48%, with a gross margin of 36.98%, up 3.29 percentage points, maintaining the first market share in China for ten consecutive years. Seasoning sauces revenue was 2.917 billion yuan, up 9.29%, with a gross margin of 45.05%, up 7.61 percentage points.

While consolidating its core categories, the company actively explores new growth drivers. Vinegar, cooking wine, and other traditional tracks are gradually gaining momentum, with other categories generating 4.68 billion yuan in revenue, up 14.55%. Health-oriented products, represented by organic and low-salt options, grew by 48.3% year-over-year, demonstrating the company’s product innovation capabilities amid consumption upgrades. The company is also accelerating expansion into adjacent fields like compound seasonings, making its product structure more diversified.

In terms of sales channels, offline revenue was 25.76 billion yuan, up 7.85%, forming a solid base; online revenue grew rapidly to 1.639 billion yuan, up 31.87%, with significant growth.

3. R&D Status: Continued Investment and Rich Innovation Results

The company adheres to the “Technology-Driven” strategy, continuously increasing R&D investment. In 2025, R&D spending was 915 million yuan, accounting for 3.17% of revenue. Over the past decade, total R&D investment exceeded 6.5 billion yuan, reflecting a long-term commitment to technological innovation. The R&D team comprises 733 personnel, making up 8% of total employees, including 21 PhDs and 288 master’s degree holders, with an ongoing optimization of talent structure. The company has established a market demand-oriented R&D system covering product development, manufacturing technology, market research, emerging tech applications, and smart equipment design.

Significant breakthroughs have been achieved in fermentation core technologies, strain breeding, key brewing equipment, and advanced testing techniques, with over 1,000 patents granted. In 2025, the Gaoming manufacturing base was awarded the world’s first “Lighthouse Factory” in soy sauce brewing, marking a leading position in digital transformation and intelligent manufacturing globally. AI-based soybean selection technology can detect about 13,000 soybeans per second to ensure raw material quality; big data-driven fermentation models precisely control the process; 24-hour NIR online spectral detection monitors every drop of soy sauce in real-time; AI electronic noses build a “flavor gene bank” with over 100 aroma profiles, integrating traditional brewing with AI and big data.

4. Core Competitiveness: Deep Technological Barriers and Strong Brand Value

The company possesses unique core competitive advantages. In terms of products, it has built a national product matrix deeply embedded in consumers’ taste memories, with 7 product series exceeding 1 billion yuan and over 30 series exceeding 100 million yuan. The golden-label soy sauce and mushroom soy sauce series have been sold for over 60 years; the Wei Ji Xian soy sauce and Haian oyster sauce have each generated over 1 billion yuan in sales for more than ten years. The company’s production and sales volume exceeds 4.8 million tons, ranking first in the industry, with scale advantages leading to significant procurement cost benefits and economies of scale.

In brand building, Haitan has been recognized as the No.1 brand in soy sauce (15 consecutive years), sauces (6 consecutive years), oyster sauce (6 consecutive years), and vinegar (2 consecutive years) in the C-BPI “2025 Top Brand List.” According to consumer index reports, Haitan’s brand penetration rate remains above 80%, ranking among China’s top ten preferred brands for 11 consecutive years. The distribution network includes over 6,000 distributors covering approximately 3 million retail outlets, with nearly 100% coverage in prefecture-level cities and over 90% in county-level cities, forming a deeply penetrated “capillary” system.

The company has leading digital and flexible production capabilities, capable of producing over 20 product variants and more than 130 SKUs on a single line, with industry-leading customization and rapid deployment. In January 2025, the company led the drafting of the national standard “General Technical Requirements for Food Digital Factories,” filling a gap in the field and demonstrating its leadership in digital transformation of the food industry.

5. Risk Warning: Intensifying Competition and Rising Costs

The seasoning industry faces increasingly fierce competition, with new entrants constantly emerging, changing the competitive landscape. Some competitors may engage in price wars to gain market share, exerting pressure on product prices and gross margins. While the company maintains advantages through brand strength, channel network, and technological edge, intensified competition could challenge market share and profitability.

Raw material price fluctuations remain a key risk. Although direct material costs decreased overall in 2025, some raw materials still face volatility. Freight costs rose sharply by 51.56% year-over-year, mainly due to supply chain reforms, logistics integration, and the construction of intelligent logistics systems, with some distributors shifting to company-managed transportation. Future fluctuations in raw material and logistics costs could continue to challenge cost control.

Policy and regulatory changes may also impact operations. The new national standards issued in 2025, such as GB7718-2025 “General Rules for Food Labeling of Prepackaged Foods” and GB/T18186-2025 “Soy Sauce Quality Standards,” impose higher requirements for transparency, product definitions, raw materials, processes, and labeling. These regulations increase industry entry barriers and compliance costs, requiring ongoing resource investment.

International expansion risks should also be noted. As the company accelerates its global strategy, overseas markets face diverse legal, cultural, exchange rate, and trade policy uncertainties. The H-share listing and overseas manufacturing bases established in 2025 mark a new stage, but the company’s risk management in international markets needs continuous strengthening.

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