[For immediate release]

(21 August 2025- Hong Kong) - Hengan International Group Company Limited ("Hengan", "Hengan International" or the "Company", SEHK stock code: 1044, together with its subsidiaries, the "Group") announces today its interim results for the six months ended 30 June 2025 ("the Period").

During the period, despite the continued unleashing of domestic demand supporting a recovery in the consumer market, the domestic daily necessities market continued to consolidate and market competition intensified. More sanitary napkin brands entering the market and competing for market share, which poses challenges for sales. Nevertheless, Hengan seized the growth opportunity arising from the increasing demand for upgraded personal care products and new retail consumption. Through a stable pricing strategies and continuous product upgrading and diversification, Hengan significantly expanded its presence on e-commerce platforms and new retail channels, while also promoting sales in traditional channels and cultivating new growth areas. The Group's omni-channel sales strategy continued to develop, with its market share consistently leading the industry.

During the period, benefiting from the growth in tissue paper sales and the increase in market share, the Group was able to offset the negative impact of intense price competition in the hygiene product industry on its sales, resulting in revenue remaining largely flat compared to the previous year. As of 30 June 2025, the Group's total revenue decreased slightly by 0.2% to approximately RMB11,808,232,000 (2024 first half: RMB11,835,893,000). In the second half of 2025, the steady growth in the Group's tissue paper sales is expected to provide solid support for the Group's overall revenue. It is anticipated that revenue will remain stable under the strategies of omni-channel sales, product personalisation and stable pricing.

Leveraging significant opportunities presented by the diversification of consumption channels, the Group continued to step up its efforts in developing its e-commerce business and new retail market. In addition to promoting brands on traditional large-scale e-commerce platforms, it also strengthened penetration into other emerging e-commerce channels. During the period, the proportion of the Group's e-commerce and new retail sales further increased to approximately 34.4% (2024 first half: 31.8%), with revenue increasing by approximately 7.9% year-on-year. In addition, the Group continued to promote sales in traditional channels and develop new growth points during the period, steadily advancing its omni-channel sales strategy.

Meanwhile, with growing domestic demand for personalised, value-added and functionally segmented upgraded hygiene products, the Group actively developed new technologies, promoted product premiumisation, enriched its product portfolio and enhanced the brand image, thus injecting new impetus into its long-term development. Key high-end products, including the sanitary napkins series "Tianshan Cotton" (天 山 絨 棉), the tissue paper series "Fluffy Cube"( 絨 立 方). The premium disposable diapers series "Q • MO" continued to be well-received by consumers during the period and maintained strong sales momentum. Coupled with this year's newly launched products, such as the organic cotton sanitary napkin series "Cranberry A+"(蔓 越 莓 A+) and the premium tissue paper series "Embracing Nature" (向 野 而 生), further contributed to the increasing proportion of premium products in overall sales, while also enhancing brand image and product reputation.

During the period under review, although the gross profit of the tissue paper segment improved and the proportion of premium products continued to increase, the Group's overall gross profit recorded a slight year-on-year decline. This was mainly due to a decline in hygiene products sales and the rising cost of fluff pulp as a raw material. In the first half of 2025, the Group's overall gross profit decreased by approximately 3.2% to approximately RMB3,811,529,000 (2024 first half: RMB 3,936,242,000). The gross profit margin also declined to approximately 32.3% (2024 first half: 33.3%). In the second half of 2025, the Group will enhance the effectiveness of its marketing resource allocation while premium, high-margin products are expected to sustain steady growth. With raw material prices expected to stay stable, the Group's gross profit is expected to remain steady.

During the period, the Group's operating profit decreased by 7.3% to approximately RMB1,757,339,000 (2024 first half: RMB1,895,891,000), mainly due to the decline in overall gross profit. Profit attributable to shareholders of the Company dropped by 2.6% to approximately RMB1,372,894,000 (2024 first half: RMB1,408,992,000). In 2025 first half, the Group's basic earnings per share was approximately RMB1.206 (2024 first half: RMB1.234).

The Board of Directors declared an interim dividend of RMB0.70 per share (2024 first half: RMB0.70 per share) or RMB813,485,000 (2024 first half: RMB813,485,000) for the six months ended 30 June 2025, maintaining a stable dividend amount.

Commenting on the Group's interim results, Mr. Sze Man Bok, Chairman of Hengan International, said, "amid a complex and challenging domestic and international environment, China implemented a series of targeted and effective macroeconomic policies, supporting a recovery in the consumer market in the first half of 2025. Facing a complex and volatile operating environment, the Group actively enhanced its comprehensive competitive advantages, focusing on enhancing profitability, advancing product premiumisation and category diversification, deepening its omni-channel sales strategy, and continuously expanding its market presence."

Hygiene Products (including Sanitary Napkins and Disposable Diapers)
China's hygiene products market holds immense growth potential. As residents' health awareness and purchasing power continue to rise, consumers are placing increasing importance on product quality, safety, and added value, driving the rapid development of the premium product segment. In addition, population ageing is fueling the expansion of the adult diaper market, while consumption upgrades and advancements in parenting concepts are contributing to the continued increase in the penetration rate of baby diapers.

In the first half of 2025, competition in the domestic hygiene products market intensified. While consumer demand for premium products increased, cautious spending behavior posed challenges for enterprises in balancing quality enhancement with cost control. To enhance its brand image and consolidate its leading position in the mid-to-high-end market and traditional sales channels, Hengan continued to advance product upgrades and its premiumisation strategy to meet consumers' demand for high-quality sanitary care products. At the same time, the Group employed moderate promotional efforts to address consumers' enthusiasm for pricing and discounts, enabling Hengan to maintain its leadership position amid fierce market competition. The Group's premium sanitary napkin series "Tianshan Cotton" continued to gain strong consumer traction throughout the period, driven by its superior quality and brand image, achieving a robust sales growth of 26.4%. On the other hand, the premium product "Q • MO" maintained steady sales growth. The Group's adult diaper business also benefited from the expanding domestic adult incontinence products market and the increasing penetration rate of its adult disposable diapers, resulting in a sales increase of approximately 1.0%.

With the rapid proliferation of new consumption patterns, sales channels have become increasingly fragmented and e-commerce platforms along with other emerging retail channels are thriving. The Group actively seized the opportunities brought by emerging consumption trends, accelerated the deployment of diversified new sales channels, while reinforcing its advantages in traditional channels. However, competition in the domestic sanitary napkin and diaper markets intensified during the period, with domestic brands adopting aggressive promotional strategies to capture market share, particularly on e-commerce platforms. This exerted pressure on the sales of sanitary napkin products and mid-to-low-end diaper products. In the first half of 2025, the Group's hygiene business recorded a revenue decline of approximately 14.4% to approximately RMB3,303,839,000 (2024 first half: RMB3,858,570,000), accounting for approximately 28.0% of the Group's total revenue (2024 first half: 32.6%). However, sales of hygiene products during the period recorded a quarter-on-quarter increase of approximately 7.3% compared to the second half of 2024, reflecting a recovery this year. The market environment is expected to remain challenging in the second half of 2025. Nevertheless, with the rising proportion of upgraded and premium products, the effective implementation of the Group's omni-channel sales strategy, the significant sales growth of the "Tianshan Cotton" series, the stable performance of "Q•MO" sales, and the steady increase in the share of adult diaper products, the Group remains committed to improving the revenue performance of its hygiene products business in the second half of 2025.

During the period, the Group's sales for sanitary napkins significantly decreased, coupled with the rising cost of fluff pulp, a key raw material, resulting in a decline in the gross profit margin of the hygiene products business to approximately 57.3% in the first half of 2025 (2024 first half: 59.5%). The Group will seize opportunities in the domestic market, and with the advancement of product upgrades and premiumisation, the gross profit margin is expected to continue improving in the second half of 2025.

The Group's hygiene product brand "Space 7" (七 度 空 間) continues to launch upgraded and premium products while striving to enhance its brand image. In the second half of 2023, the Group introduced its key new product, the "Tianshan Cotton" series, which uses rare and pure long-staple cotton from the snowy Tianshan Mountains. This launch further strengthened the Group's presence in the high-end feminine care segment. During the period, sales of the "Tianshan Cotton" series reached approximately RMB 290.0 million, representing a year-on-year increase of about 26.4%, and its sales are expected to grow steadily. The Group appointed Zhao Jinmai, a female artist known for her cheerful and refreshing image, as the brand ambassador of 七 度 空 間, injecting youthful vitality into the brand and further enhancing its image to attract young and white-collar consumers. In addition, the "Pants-style" sanitary napkin series continued to demonstrate strong growth potential, with sales reaching approximately RMB 310.0 million during the period, representing a year-on-year increase of approximately 8.0%. The Group will continue to actively promote the "Pants-style" sanitary napkin series, including the upgraded "Sweet Dream Pants" version, to increase the penetration of high-end products. The Group believes that the upgraded and premium versions of the 七 度 空 間 sanitary napkin series will remain a key growth driver of the hygiene products business, helping to expand market share and increase the revenue contribution from high-end products.

During the period, "Space 7" (七 度 空 間) launched a new organic cotton sanitary napkin product, "Cranberry A+"(蔓 越 莓 A+) , which combines natural cranberry essence with 12-hour long-lasting antibacterial protection. The product also features an innovative microcapsule deodorising technology to enhance menstrual hygiene and user experience. Designed with features to prevent leakage during prolonged sitting, it offers improved comfort and peace of mind, meeting the modern woman's demand for high-quality, safe and healthy hygiene products. In addition, "Q•MO" introduced its upgraded "Royal Supreme Softness" diaper series, featuring improvements in both size and absorption capacity. The product also includes an accordion-style ultrasonic breathable waistband, enhancing airflow and overall breathability. These upgrades help the Group capitalise on growth opportunities for the "Q•MO" product line. The Group continues to launch practical, health-focused, and thoughtfully designed upgraded products, injecting new growth momentum into its business amid a challenging market environment. During the period, 'Q•Mo' recorded sales of approximately RMB 340.0 million, representing a year-on-year growth of about 6.6%.

As essential daily necessities, hygiene products continue to drive market expansion in China. The industry is currently at a critical stage of transformation, upgrading and standardised development. The Group will continue to develop high-quality products, optimise the proportion of new retail channels, allocate promotional expenses appropriately, and strengthen growth in traditional channels to support long-term development and consolidate its leading position. Furthermore, the Group remains committed to implementing a dual high-end strategy across both the baby and adult health care markets, while enhancing cooperation with maternity stores, elderly care centres and hospitals to support the long-term development of its adult health care product business.

For more information, please visit https://doc.irasia.com/listco/hk/hengan/interim/2025/intpress.pdf.

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