Coconut water struggles to take the lead, and snack wholesale profits are under pressure. Joyful Family's net profit sharply declines by 70% in 2025.

Zhengquan Zhixing Wu Fan

In 2025, the domestic coconut juice market is still growing. Although the overall pie is getting bigger, some traditional giants are finding it increasingly difficult to share in the pie.

Recently, the domestic traditional coconut juice brand Huanlejia (300997.SZ) released its 2025 annual report. During the reporting period, the company achieved revenue of 1.5 billion yuan, a year-on-year decline of 19.11%; it recorded a net profit attributable to the parent company of 44.1746 million yuan, a sharp decrease of 70.03%. In the same month that it announced this somewhat bleak report card, the company also disclosed that its actual controller and chairman, Li Xing, transferred 10.9368 million shares at a price of 17.34 yuan per share through a price inquiry method, cashing out approximately 190 million yuan. Against the backdrop of the company’s declining performance, the large-scale reduction in holdings by the actual controller also shook the confidence of some investors. As of March 10, the total number of shareholders stood at 22,738, a decrease of 2,782 from the same month last year.

Distribution Channel Slowdown, Emerging Channels Under Profit Pressure

Huanlejia’s products are mainly divided into two categories: one is beverage products represented by coconut juice plant-based protein drinks and coconut water; the other is canned foods centered around canned yellow peaches and canned oranges, as well as eight-treasure porridge. Regarding the reasons for the decline in performance during the reporting period, Huanlejia stated that the sales revenue from its distribution channels had decreased to some extent due to pressure from the consumption environment and intense industry competition.

Zhengquan Zhixing noted that the distribution channels heavily relied on by Huanlejia are under continued pressure. In 2024, even with a net increase of 79 distributors throughout the year, the company’s distribution revenue still experienced a double-digit decline; in 2025, revenue from distribution channels continued to weaken, contributing 1.103 billion yuan, with a year-on-year decline expanding to 26.95%.

From the channel perspective, in recent years, snack wholesale stores represented by Mingming Hen Mang and Wancheng Group have been expanding rapidly, squeezing the survival space of traditional distributors with their lower pricing systems. Faced with this rapidly growing retail format, brands are also re-evaluating their channel strategies and accelerating their exploration of transformation paths.

In 2025, snack wholesale stores became Huanlejia’s second-largest revenue channel for the first time, achieving revenue of 175 million yuan, a year-on-year increase of 52.06%. From the customer structure, Mingming Hen Mang and Wancheng Group’s Nanjing branch became the company’s new top two customers, with total sales accounting for 61.82% of the total sales of the top five customers, representing nearly 10% of annual sales.

Although the snack wholesale channel is experiencing strong growth momentum, its revenue volume is still insufficient to make up for the decline in core channels. Moreover, the “cost” of embracing emerging channels is gradually becoming evident in profitability; in 2025, the gross profit margin for this channel fell by 3.04 percentage points year-on-year to 17.81%, significantly lower than other sales models, ultimately dragging down the company’s overall gross profit margin by 3.63 percentage points to 31.44%.

With the rise and fall of new and old channels, the revenue proportion from distribution channels has decreased from 95.63% in 2023 to 80.35% in 2025, corresponding to a reduction in the number of distributors from 2,157 to 1,962, with a net decrease of 274 in 2025. It is clear that transforming the channels is not an easy task for Huanlejia; sticking to the traditional distribution system makes it difficult to reverse the declining trend of shrinking channels; if betting on the snack wholesale channel, one must bear the cost of continued pressure on gross margins in the short term, while also facing the loss of distributors.

New Categories Still in Development, Chairman Cashing Out Over 400 Million

From the category perspective, Huanlejia’s revenue structure is under multiple pressures. The core product, coconut juice beverage, achieved revenue of 756 million yuan in 2025, with the decline further widening from 3.66% in the same period last year to 21.51%. Canned fruits also performed poorly, with annual revenue of 502 million yuan, a year-on-year decline of 19.96%.

As a sub-segment of coconut juice beverages, the market for coconut water has been rapidly growing in recent years, with an increasingly competitive landscape featuring one dominant player and many strong contenders, and new brands gradually entering the market. In this trend, domestic traditional coconut juice brands, including the Coconut Tree Group and Huanlejia, are also pursuing a dual-line layout of “coconut juice + coconut water.”

In the first half of 2025, Huanlejia revamped the branding of its coconut water series products and launched two new beverages, coconut pulp coconut water and coconut water drink, in the second half of the year, broadening the price range of coconut water products. However, the company’s management admitted during an institutional survey in September 2025 that its coconut water products are still considered nurturing products, with limited contribution to the company’s operating revenue in the short term.

However, beneath the surface of a “halved” decline in net profit, the company’s cash flow situation presents a different picture. In 2025, the net cash flow from operating activities for Huanlejia was 88.4938 million yuan, a significant increase of 46.85% compared to 60.2601 million yuan in the same period last year. Regarding the discrepancy between the two, Huanlejia explained that the main reason was a reduction in the depreciation and amortization of fixed assets and intangible assets affecting net profit, but it did not impact the net cash flow from operating activities.

The annual report shows that the company’s asset impairment provision was 10.2849 million yuan, and the depreciation amount for fixed assets was 73.5228 million yuan, among which the depreciation and amortization expenses for one of the company’s initial public offering projects, “Annual Production of 136,500 Tons of Beverages and Canned Food Construction,” were relatively high, and production capacity had not yet been released, with annual profits not meeting expectations.

However, it is noteworthy that during this critical period of pressure on company performance and transformation pains, the reduction and cashing out behavior of the actual controller has received more market attention. Since 2025, Huanlejia Chairman Li Xing has conducted multiple price inquiry transfers. In July of that year, Li Xing transferred 13.1242 million shares at a price of 13.55 yuan per share; in December of the same year, Li Xing transferred 3 million shares at a price of 19.43 yuan per share, while the company’s controlling shareholder, Haoxing Investment, and Li Xing’s wife, Zhu Wenzhan, reduced their holdings by 8 million shares and 6 million shares, respectively; and in March of this year, Li Xing again reduced his holdings by 10.9368 million shares at a price of 17.34 yuan per share.

This means that since July 2025, Li Xing has cumulatively cashed out approximately 426 million yuan, with related parties cashing out over 200 million yuan in total. Facing the dual pressure of continuously declining performance and frequent reductions by major shareholders, some investors have questioned on the exchange’s interaction platform: how will the company change the status quo and reward investors? Huanlejia responded that it will continue to manage operations well and strive to enhance operational quality. However, finding a balance between channel transformation, category breakthroughs, and restoring investor confidence remains a pressing question for management. (This article was first published by Zhengquan Zhixing, author | Wu Fan)