Crayfish price increase squeezes profits, pre-made dish gross profit declines, and Annui Food's first year of H-share listing sees an 8.46% drop in net profit

Image source: Visual China

Blue Whale News, April 2 (Reporter Dai Ziting) The rising prices of crayfish ingredients have not spared the first listed frozen food company either—“increased revenue but not increased profit.”

On April 1, Yane Foods (603345.SH) released its first annual report after its “A+H” listing. In 2025, the company recorded operating revenue of 16.193 billion yuan, up 7.05%; net profit attributable to shareholders was 1.359 billion yuan, down 8.46% year over year; after deducting non-recurring items, net profit was 1.244 billion yuan, down 8.49% year over year.

This is the first time since Yane Foods’ A-share listing in 2017 that its net profit attributable to shareholders has shown negative year-on-year growth on an annual basis. The company explained that profit pressure was mainly driven by factors such as an increase in depreciation of fixed assets, rising ingredient costs like crayfish, increased foreign exchange losses, and goodwill impairment.

On the other hand, revenue growth mainly came from the steady advancement of its traditional business and the baking business growth contributed by the newly acquired Dingwei Tai, but the profit side was squeezed by multiple factors one after another.

Blue Whale News reporters reviewed Yane Foods’ financial reports over the years and found that from 2022 to 2025, the company’s operating revenue rose steadily from 12.106 billion yuan to 16.193 billion yuan, with a four-year compound annual growth rate of about 10.2%. Meanwhile, after net profit attributable to shareholders reached a high point of 1.478 billion yuan in 2023, it slightly increased to 1.485 billion yuan in 2024, but fell back to 1.359 billion yuan in 2025, down 8.46% year over year, marking the first negative growth since its listing.

In terms of product mix, in 2025 the company’s revenue from frozen prepared foods was 8.450 billion yuan, up 7.79%, with a gross margin of 28.35%, down slightly by 0.94% year over year, still the company’s most stable source of profit. Revenue from frozen dishes (ready-to-cook meals) was 4.821 billion yuan, up 10.84%, but its gross margin was only 9.49%, down 2.27% year over year, making it the segment with the lowest gross margin. Revenue from frozen noodles and rice-based products was 2.400 billion yuan, down 2.61% year over year, with a gross margin of 22.89%, down 1.47% year over year.

Behind the decline in profit, cost-side pressure is particularly prominent. The company’s financial disclosures show that in 2025, Yane Foods’ cost of operating revenues grew 9.41%, higher than its revenue growth of 7.05%. Among them, the average procurement price of fresh shrimp (crayfish) raw materials increased 43.75% year over year, the largest category by growth rate. The inventory volume of frozen dishes rose 54.84% year over year; the company explained this was due to an increase in inventories of crayfish-related products.

It is understood that in 2025, the price trend of crayfish showed a typical pattern of “a low opening followed by a rise, then a trailing-off at the end.” After the late June period, the market suddenly reversed. According to YiMuTian data, after June 20, the average wholesale price of live crayfish from producing areas entered a fluctuating upward channel; by July 21, it was up about 8.55% compared with June 20.

At the consumer end, the price increases for commonly used varieties like medium shrimp and large shrimp were even more dramatic. Taking quotes from the Huangsha Aquatic Products Trading Market as an example, medium shrimp rose from 14.5 yuan per jin on June 20 to 20 yuan per jin on July 21, an increase of about 37.93%; large shrimp jumped from 18 yuan per jin to 34 yuan per jin, up as much as 88.89%. After entering winter, the price of crayfish in Qianjiang generally doubled versus summer. Crayfish priced at 7 to 9 qian sold for 48 yuan per jin, and the head meat rose to 60 yuan per jin. According to a prior report by Yangcheng Evening News, in Changsha, at popular crayfish shops, per-capita spending held steady above 100 yuan; some chain brands took off a 48.8-yuan two-person meal and replaced it with an 88-yuan three-jin two-person meal.

For downstream processing companies like Yane Foods, rising raw material prices mean direct compression of profit margins. A research report from Soochow Securities stated that in 2025, Yane Foods’ controlling subsidiaries XinHongYe and XinLiuWu (both are the core entities of the company’s frozen dish business, mainly engaged in crayfish processing and fish paste production) respectively generated revenue of 1.58 billion yuan and 1.25 billion yuan, but their net sales profit margins were only 2.0% and -0.6%, respectively. Although revenue from crayfish increased, profit pressure was significant. In addition, multiple brokers’ research reports mentioned that in 2025 the company’s goodwill impairment pressure mainly came from crayfish-related assets. The annual report shows that Hubei XinLiuWu Food Group Co., Ltd.’s operating profit in 2025 was -15.58 million yuan, and net profit was -7.84 million yuan.

Fortunately, entering 2026, the crayfish market price has gradually fallen. According to a report by Sichuan Daily, in the late March 2026 period, the price of small shrimp in the Chengdu aquatic products market was 17 to 18 yuan per jin; the average price of medium shrimp was 26 yuan per jin; and the average price of large shrimp was 32 yuan per jin—3 to 5 yuan cheaper per jin than the same period last year.

Worth mentioning is that the company’s new business has turned out to be “more than competitive.” In July 2025, Yane Foods acquired Jiangsu Dingwei Tai and immediately established a baking business division. With Dingwei Tai’s export qualification, the company’s products have already covered markets such as Australia, Japan, and Hong Kong, China. The annual report also disclosed that the company’s newly added revenue from baked foods was about 68 million yuan; Dingwei Tai alone achieved net profit of about 82.03 million yuan in 2025, with the performance commitment completion rate reaching 130.92%, performing beyond expectations.

As for cash flow, in 2025 the company’s net cash flow from operating activities was 2.317 billion yuan, up 10.12%; the net cash flow from financing activities was 1.488 billion yuan, mainly from fund-raising after its H-share listing; the net cash flow from investing activities was -1.146 billion yuan, compared with -3.205 billion yuan in the same period last year—investment spending was reduced.

According to a prior company announcement, on July 4, 2025, Yane Foods officially listed on the main board of the Hong Kong Stock Exchange, becoming the first domestic frozen food company to be listed on both A-shares and H-shares. It issued about 39.9947 million H shares, raising net proceeds of about HK$2.55 billion. On the first day of listing, the H-share stock closed at 57 HKD.

In its prospectus at the time, the company clearly stated that it planned to use the H-share platform to advance its internationalization strategy and overseas business layout. The proceeds would be used to expand the sales and distribution network, enhance procurement capabilities, optimize the supply chain, and build a supply-chain system, among other purposes.

But judging from the 2025 annual report, actual progress in overseas markets is still at the starting stage. In 2025, the company’s revenue from overseas markets was only 187 million yuan, up 11.55%, but it accounted for only about 1% of total revenue. In 2024, this share was also only 1.1%. Based on the disclosures in the annual report and prospectus, the proportion of overseas business income remains low, and overseas business is still in its early stage.

Yane Foods already has some foundation in international expansion. In 2021, it entered the European market by acquiring 70% of the shares of UK KungFu Food. Its products are currently sold in sales markets including Hong Kong, Southeast Asia, Australia, and Europe, and are especially popular in areas with dense Chinese communities. Southeast Asia is treated as a key target region for going overseas mainly because dietary habits are relatively close to those in China and there is a large Chinese population there, making market education costs relatively lower. In its prospectus, the company also planned to use Southeast Asia as a springboard to expand into the global halal food market, and in December 2025 it officially launched the “Anzhai” new project.

However, with the overseas market still relatively small, to achieve a true breakthrough toward globalization, Yane Foods still faces many challenges in terms of overseas M&A integration, localized supply-chain building, and brand promotion.