China Want Want increases revenue but not profit, channel shift first squeezes margins.

Rising costs, a surge in expenses, and channel shifts are jointly squeezing Want Want China’s profit performance.

On June 30, Want Want China Holdings Limited disclosed its performance for the year ended March 31, 2026.

During the reporting period, the company achieved revenue of RMB 24.401 billion, up 3.8% year on year; sales volume registered high single-digit growth year on year; and profit attributable to equity holders was RMB 3.837 billion, down 11.5% year on year.

The increase in raw material costs, higher expenses after organizational adjustments, and greater investment during the transition between old and new channels have all compressed profit margins.

On the cost side, driven by higher unit consumption costs of imported whole milk powder and palm oil, the company’s gross margin fell from 47.6% in the previous fiscal year to 46.3%, a year-on-year decline of 1.3 percentage points.

Compared with the external hard inflation stemming from raw materials, the sharp rise in operating expenses caused by internal organizational structure adjustments is a more significant internal driver behind the decline in operating profit.

In fiscal year 2025, Want Want China’s distribution costs increased 16.9% year on year to RMB 3.540 billion, rising to 14.5% of revenue; among them, administrative expenses increased 11.4% year on year to RMB 3.352 billion, rising to 13.7% of revenue.

Previously, Want Want China reorganized its product categories and established new product business units based on those product categories. After the organizational split, the number of personnel in relevant positions increased, and labor costs rose correspondingly, causing the company’s total compensation in fiscal year 2025 to increase 8.9% year on year.

At the same time, to improve different consumer groups’ awareness of new products and niche products, Want Want China increased investment in marketing promotion and cross-industry marketing. During the reporting period, the company’s advertising and promotion expenses as a proportion of revenue reached 3.8%, up 1.1 percentage points year on year.

Looking at the performance of major single products, Want Want China still relies on its core categories to support the bottom line, but growth momentum has begun to diverge.

Dairy products and beverages remain the largest source of revenue. In fiscal year 2025, this segment generated revenue of RMB 12.343 billion, up 1.9% year on year, accounting for approximately 51% of total revenue.

Among them, Want Want’s Wangzai milk was affected by the overall sluggishness in the dairy market, and its revenue declined slightly by 0.3% year on year. As Want Want China’s most important major single product, Wangzai milk still has fundamental significance, but its pulling power as a single blockbuster product is no longer as strong as in the past.

Revenue from rice snacks was RMB 5.936 billion, up 0.5% year on year, with sales volume growing by high single digits year on year. Revenue from snack foods was RMB 5.915 billion, up 10.4% year on year; this is the best-performing segment among the three major categories, and sales volume also grew by double digits.

Full-year revenue for the candy subcategory grew by low double digits year on year, reaching a historical high. Ice cream, snack pastries, beans, jellies, and other subcategories also recorded growth ranging from high single digits to low double digits.

In essence, changes in category structure are the result of a shift in channel focus.

In fiscal year 2025, revenue from traditional wholesale and modern channels—accounting for nearly 70% of Want Want China’s total revenue—declined by high single digits year on year. Meanwhile, snack wholesalers and emerging channels quickly filled the gap, and their share of total revenue reached approximately 15%.

Online and other emerging channels also became sources of incremental growth. The financial report shows that revenue from emerging channels such as e-commerce and OEM grew by double digits year on year, accounting for a low double-digit percentage of total revenue.

Although the channel direction is being adjusted, the short-term effects are still reflected in higher expenses and a decline in profit margins.

In his letter to shareholders, Chairman Tsai Yanming frankly admitted that the group’s nearly two-year strategy of “conquering cities and securing all-under-heaven under Want” has “not been overall very satisfactory, and there remains a certain distance from the goal.”

To this end, the board has decided to appropriately reduce the final dividend ratio for fiscal year 2025, in order to retain a more ample cash reserve to cope with short-term uncertainties such as weak domestic consumption.

In fiscal year 2025, Want Want China plans to pay a final dividend of 1.38 Hong Kong cents per share; for the previous fiscal year it was 2.04 Hong Kong cents per share. Based on the per-share dividend, this is a reduction of 0.66 Hong Kong cents, representing a decrease of approximately 32.4%.

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