Net profit plummeted by 70%, Happy Family is no longer joyful

After releasing the 2025 annual report, Joyful Home really struggles to find joy.

The net profit attributable to the parent company plummeted by 70%, core categories stalled across the board, and the exodus of distributors has led this leading canned fruit company to a crossroads in its fate.

This also signals again that the non-essential commodity characteristics of canned fruits and the high sugar and high energy traits of coconut-based beverages are no longer preferable in the fiercely competitive fast-moving consumer goods market.

As sugar-free and health-focused trends become mainstream in the beverage industry, channel transformation no longer relies on distributors, and Joyful Home’s response seems somewhat lagging.

What investors find even harder to understand is that at a time when performance continues to decline sharply, the company’s actual controller frequently reduces holdings, inevitably increasing market concerns about the company’s development.

Performance Plummets

In 2025, Joyful Home (300997.SZ) continues to suffer, yielding a rather dismal report card.

On the evening of March 25, the company disclosed its 2025 annual report, achieving approximately 1.5 billion yuan in operating revenue and a net profit attributable to the parent company of about 44 million yuan, down 19.11% and 70.03% year-on-year, respectively. The net profit after deducting non-recurring items was about 41 million yuan, a decrease of 71.75%. Its gross profit margin was 29.59%, a decrease of 4.41 percentage points compared to the previous year.

This is not the first time the company’s performance has declined. In 2024, its net profit attributable to the parent company fell by 47.06%, to about 147 million yuan.

In response to last year’s sharp drop in performance, the company believes it mainly stems from market, channel, and raw materials, each factor directly hitting the heart.

In terms of market, weak consumption and intensified industry competition have resulted in a 26.95% year-on-year decline in revenue from distribution channels; the expanded bulk snack channel and initial processing of coconut raw materials are still in the cultivation stage and have not yet formed scale, affecting overall profitability.

In fact, the most direct impact on Joyful Home comes from the rising costs of upstream raw material procurement. Last year, due to weather changes, the procurement prices of yellow peach, coconut meat juice, and others surged more than 30% year-on-year, leading to an increase in production costs of about 39 million yuan.

To cope with rising upstream costs, the company raised prices on some coconut juice products by 1%-8% last year, trying to pass the pressure onto the end consumers, but the price increase was far lower than the rise in raw material costs, resulting in a decline in gross profit margin.

In 2025, the company’s coconut juice beverage products achieved revenue of approximately 756 million yuan, a year-on-year decrease of 21.51%; revenue from canned fruits was about 502 million yuan, a year-on-year decrease of 19.96%. The gross profit margins for the two main businesses were 36.39% and 24.97%, respectively, down 3.79 percentage points and 3.93 percentage points year-on-year.

Faced with such a situation, Joyful Home attempts to stabilize market confidence with high dividends, proposing to distribute a cash dividend of 2.0 yuan (tax included) for every 10 shares to all shareholders for the fiscal year 2025, totaling about 84 million yuan, accounting for 189.34% of the net profit for the period.

Product and Channel Aging

2023 was a highlight moment for Joyful Home since its listing, achieving operating revenue of 1.923 billion yuan and a net profit attributable to the parent company of 278 million yuan. However, as market competition intensified, performance continued to decline. The fundamental reason lies in the aging product structure and channel imbalance.

The company’s two main products are canned fruits and coconut-based beverages, both showing clear signs of aging. With the maturation of the fresh supply chain, fewer people are eating canned fruits; coconut-based beverages, due to their high sugar and high-calorie content, also run counter to the health trend of sugar-free products.

From 2023 to 2024, the revenue from canned fruits decreased from 709 million yuan to 627 million yuan, barely maintaining around 500 million yuan last year. Over these three years, the gross profit margin for canned fruits dropped from 30.52% to 24.97%, and the revenue proportion fell from 36.86% to 33.45%.

Perhaps anticipating the outlook for canned fruits, since 2014, Joyful Home has focused on cultivating coconut juice and other coconut-based beverage products. Relying on its layout in lower-tier markets, this business’s revenue scale has risen year by year, once expected to become the second “Coconut Tree.”

In 2023, the revenue from coconut juice beverages exceeded 1 billion yuan for the first time, accounting for 52.02% of the company’s total revenue, but then it fell sharply.

Joyful Home’s product sales still rely on traditional distribution channels. From 2023 to 2025, revenue from distribution channels fell from 1.818 billion yuan to 1.103 billion yuan, with the proportion of total revenue dropping from 94.56% to 73.54%. Last year, the number of distributors decreased by 274.

The gap in channel structure is being filled by snack wholesalers, e-commerce, and other channels. In 2025, the company’s snack wholesale revenue reached 175 million yuan, a year-on-year increase of 52.06%, but due to the small revenue scale, it has yet to contribute to overall revenue growth.

Due to weak product sales, the company faces significant idle capacity. In 2025, its designed capacities for beverages and canned goods were 574,600 tons and 163,600 tons, respectively, while the actual production was 157,200 tons and 52,800 tons.

Frequent Reductions by Major Shareholders

On one side, the company is under operational pressure; on the other, the actual controllers and concerted actors are continuously reducing their holdings, raising strong market doubts.

In July 2025, Joyful Home’s shareholder and chairman Li Xing began reducing his holdings, selling 13.1242 million shares through a pricing inquiry, with a transaction amount of about 179 million yuan;

In December last year, the controlling shareholder Hao Xing Investment along with Li Xing and Zhu Wenzhen reduced their holdings by 9.376 million shares through a pricing inquiry, cashing out about 182 million yuan.

And it doesn’t stop there. On March 10 of this year, Li Xing continued to transfer a total of approximately 10.9368 million shares to 17 institutions through a pricing inquiry, cashing out about 190 million yuan.

Li Xing’s identity is special; he is not only a company shareholder and chairman but also one of the actual controllers. Why he reduced his holdings amid poor performance is hard for the outside world to understand.

The reasons he gave for the three reductions were all related to his own funding needs. This is not difficult to understand; as of March 12 of this year, Li Xing’s personal share pledge rate had reached as high as 86.97%.

In fact, it is not only Li Xing; his family members and the controlling shareholders have a high proportion of pledged shares in Joyful Home. As of March 12 of this year, Hao Xing Investment, Li Xing, Zhu Wenzhen, and Li Kangrong had a combined pledge ratio of 69.28%. The pledged shares due within the next year for Hao Xing Investment and its concerted actors total 77.98 million shares, accounting for 25.76% of their holdings and 17.83% of the company’s total share capital, corresponding to a financing balance of about 522 million yuan. Among them, the total pledged shares due in the next six months amount to 58.70 million shares, corresponding to a financing balance of 387.4 million yuan.