[For immediate release]
Financial Highlights:
(19 August 2026 - 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 2026 ("the Period").
During the period, competition in the domestic household products market continued to intensify. In the face of a challenging operating environment, Hengan closely captured the demand for product upgrades in personal care and the growth opportunities arising from new retail channels. By adhering to stable pricing strategies and deepening its product premiumisation and omni-channel layout, while actively managing supply chain fluctuations, the Group continued to demonstrate strong business resilience, outperforming its industry peers. Intense promotional competition in the market put pressure on sales performance, resulting in the Group's revenue for the first half of 2026 decreasing by 6.1% year-on-year ("y-o-y") to approximately RMB11.09 billion (2025 first half: RMB11.81 billion). Looking ahead to the second half of 2026, the operating environment will remain challenging. However, the sales contribution from premium products is anticipated to sustain steady growth, supporting further improvement in profitability. The Group will strive to maintain stable full-year revenue by optimising its omni-channel layout, strengthening brand promotion, and precisely deploying promotional resources.
The Group adapted to the new integrated online-offline consumption model and actively advanced its omni-channel strategy. During the period, the Group vigorously developed its e-commerce and new retail channels, including emerging platforms such as instant retail and live streaming commerce, thereby broadening the Group's revenue streams. During the period, sales revenue from e-commerce and new retail channels increased by 4.6% y-o-y, accounting for 38.3% of total sales (2025 first half: 34.4%). Concurrently, the Group proactively explored new growth drivers within traditional channels, with sales efficiency being particularly pronounced in the hygiene products market. In addition, the Group continued to advance product premiumisation and enrich its product portfolio to satisfy consumers' rising expectations for product functionality and added value, while elevating its brand image to provide solid support for long-term development. Key premium products, including the "Tianshan Cotton" (天山絨棉) sanitary napkin series and the "Hearttex" (心相印) wet wipe series maintained strong sales momentum during the period, effectively enhancing profitability. Furthermore, the Group's newly launched oriental cotton sanitary napkins "Petite Warm Heart" (小暖心) and the "Embracing Nature" (向野而生) premium tissue series aligned with the trend of "value consumption", injecting new momentum into the Group's overall revenue growth.
During the period under review, easing raw material prices and a higher proportion of premium high-margin products effectively offset the impact of the overall sales decline, driving a y-o-y increase of approximately 2.7% in the Group's overall gross profit to approximately RMB3.91 billion (2025 first half: RMB3.81 billion). The Group's gross profit margin also rose by 3 percentage points y-o-y to approximately 35.3% (2025 first half: 32.3%). Looking ahead to the second half of 2026, benefited from stabilising raw material prices, the Group's scale advantages in raw material procurement, and the continuous growth of premium and high-margin products, the Group expects to strengthen its supply chain resilience, thereby sustaining stable overall profitability.
During the period, operating profit increased by 12.6% to approximately RMB1.98 billion (2025 first half: RMB1.76 billion), mainly due to the improvement in the Group's overall gross profit. Profit attributable to equity holders of the Company decreased by approximately 8.7% to approximately RMB1.25 billion (2025 first half: RMB1.37 billion). For the first half of 2026, the Group's basic earnings per share was RMB1.104 (2025 first half: RMB1.206).
The Board of Directors declared an interim dividend of RMB0.70 per share (2025 first half: RMB0.70 per share) for the six months ended 30 June 2026, with a total payout of RMB0.81 billion (2025 first half: RMB0.81 billion), maintaining a stable dividend payout.
Commenting on the Group's interim results, Mr. Hui Ching Lau, Chief Executive Officer and Acting Chairman of the Group, said, "In the first half of 2026，the global economy continued to recover at a relatively slow pace，China implemented more proactive and effective macroeconomic policies, effectively responding to external shocks and challenges. The industrial structure continued to optimise, sustaining a momentum of innovation and qualitative upgrade. Facing a complex and volatile market environment, the Group remained focused on profitability, advancing product premiumisation and omni-channel layout, steadily expanding its market share, while optimising supply chain management and strengthening risk resilience to achieve stable business development."
Hygiene Products (including Sanitary Napkins and Disposable Diapers)
During the period, domestic brands aggressively deployed promotional strategies to seize market share, which exerted pressure on the Group's hygiene products sales, particularly within the disposable diaper segment. Consequently, the Group's sales revenue from the hygiene products business for the first half of 2026 recorded a decline of approximately 2.8% y-o-y to approximately RMB3.21 billion (2025 first half: RMB3.30 billion), accounting for approximately 29.0% of the Group's overall revenue (2025 first half: 28.0%). Nevertheless, the Group's premiumisation and brand-building initiatives for its hygiene products business achieved remarkable success, as evidenced by the sustained strong sales of its premium series "Tianshan Cotton" and "Pant-style". Looking ahead to the second half of 2026, despite persistent market competition, the full-year revenue of hygiene products business is expected to stay stable, underpinned by last year's low base, a higher premium and high-margin product mix, brand rejuvenation, and omni-channel momentum.
During the period, the continued sales growth of premium high-margin products series "Tianshan Cotton" and "Pant-Style", together with the drop in raw material prices, offset the decline in hygiene products sales, leading to an increase in the hygiene products business's gross profit margin to approximately 58.5% for the first half of 2026 (2025 first half: 57.3%). The Group will leverage on its scale advantage in procurement, omni-channel sales efficiencies, and an expanding share of premium and high-margin products to effectively mitigate the cost pressures brought by supply chain fluctuations.
Tissue Paper
During the period, promotional competition in the domestic tissue paper market intensified. As the Group maintained a stable pricing strategy while balancing returns and profitability across multiple fronts, its sales performance was consequently under pressure, with price pressures within the dry tissue segment and e-commerce channels being particularly pronounced. This resulted in a y-o-y decline of approximately 5.9% in sales from the tissue paper business to approximately RMB6.75 billion during the period (2025 first half: RMB7.17 billion). Benefiting from its focus on "value competition", product diversification, and omni-channel strategies, the Group sustained its market leadership position. Sales of the tissue paper business accounted for approximately 60.8% of the Group's total revenue (2025 first half: 60.8%). Looking ahead to the second half of 2026, industry consolidation is expected to ease price competition, while the demand for premium and high-quality tissues will continue to grow. The Group will continuously increase the penetration rate of its premium products and optimise its sales channel layout, with the full-year revenue of tissue paper business projected to be stable to slightly lower.
During the period, relatively low wood pulp prices reduced tissue cost pressures, and together with an increased share of premium high-margin tissue products, effectively offset the decline in sales, leading to an improvement in the gross profit margin of tissue paper products to approximately 24.9% for the first half of 2026 (2025 first half: 21.9%). Looking ahead to the second half of 2026, wood pulp prices are anticipated to remain stable. The Group will continuously increase the sales mix of premium products to solidify the profitability of the tissue paper business.
Other Income (including revenue from raw material trading business, the household products business, and international business development)
During the period, other income decreased by approximately 14.9% y-o-y to approximately RMB1.13 billion (2025 first half: RMB1.33 billion). During the period, revenue from the household products business was approximately RMB0.17 billion (2025 first half: RMB0.15 billion), representing a y-o-y increase of approximately 19.6% and accounting for approximately 1.6% of the Group's revenue. International business development revenue primarily includes finished products and raw paper export operations, business related to medical products and income from Malaysia's Wang-Zheng Group. In the first half of 2026, turnover of international business development was approximately RMB0.75 billion (2025 first half: RMB0.74 billion), accounting for approximately 6.8% of the Group's overall sales (2025 first half: 6.3%) The Group's Wang-Zheng Group business in Malaysia saw a steady development during the period and its turnover increased by 7.7% y-o-y to approximately RMB0.28 billion (2025 first half: RMB0.26 billion) accounting for approximately 2.5% of the Group's overall sales (2025 first half: 2.2%).
Looking ahead to the second half of 2026, Mr. Hui Ching Lau, Chief Executive Officer and Acting Chairman of the Group, said, "Despite the complex and volatile external environment, China's economic fundamentals remain solid. The nation will continue to deepen macroeconomic regulation and intensify efforts to implement consumption-promoting policies, which are expected to further release the potential of domestic demand and accelerate the upgrade of consumption structures, providing solid support for the steady growth of the domestic economy. Driven by the dual forces of rigid demand and consumption upgrades, the long-term growth prospects of the domestic sanitary products industry remain promising. Despite the highly uncertain outlook of the global supply chain, an increase in domestic wood pulp supply is expected to support the stable performance of wood pulp prices in the second half of the year, keeping costs relatively controllable. Concurrently, the Group will leverage its procurement scale advantage and continue to raise the share of premium high-margin products to enhance its resilience against supply chain fluctuations. As a leading player in the industry, the Group will continue to implement its three core strategies, including ‘Focus on Core Businesses', ‘Brand Leadership' and ‘Long-Termism', laying a solid foundation for the sustainable development of the Group."
For more information, please visit https://doc.irasia.com/listco/hk/hengan/interim/2026/intpress.pdf.
| © Copyright 1996-2026 irasia.com Ltd. All rights reserved. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |