On March 26, Foshan Haitian Flavouring And Food Company Ltd. (603288) / HAITIAN FLAV (03288) released its annual report, revealing that full-year revenue and net profit for 2025 reached new historical highs. Against a backdrop of industry-wide pressure, the company achieved high-quality growth driven by its products, distribution channels, and digital transformation. Combined with a high dividend payout ratio, these strong results propelled both its A-shares and H-shares to significant gains on the trading day following the earnings release, with analysts optimistic about further valuation upside.
Notably, HAITIAN FLAV is a constituent of the Hong Kong 100 Strong series, having been honored with the awards for "Most Noteworthy IPO of the Year" and "Leading Consumer Enterprise of the Year" at the 12th "Hong Kong 100 Strong" awards ceremony.
Financial results show the company achieved annual revenue of 28.873 billion yuan in 2025, a year-on-year increase of 7.32%. Net profit attributable to shareholders reached 7.038 billion yuan, up 10.95% year-on-year, while adjusted net profit was 6.845 billion yuan, rising 12.81%. Net cash flow from operating activities was 7.746 billion yuan, an increase of 13.24%, indicating strong profitability and cash flow quality.
The company's product portfolio demonstrated a pattern of a "solid core business alongside emerging growth drivers." Its three core categories—soy sauce, oyster sauce, and seasoning paste—generated revenues of 14.934 billion yuan, 4.868 billion yuan, and 2.917 billion yuan respectively last year, with growth rates of 8.55%, 5.48%, and 9.29%, forming a stable earnings foundation. Health-focused products, particularly the organic and low-sodium series, became a powerful growth driver, with revenue surging 48.3% year-on-year. Emerging categories like vinegar and cooking wine are also gaining momentum. The company has now established a product matrix comprising seven product lines with over 1 billion yuan in revenue each and more than 30 lines exceeding 100 million yuan.
Distribution channels saw balanced growth across online and offline platforms. Offline channel revenue reached 25.76 billion yuan in 2025, up 7.85% year-on-year, supported by deeper penetration into lower-tier markets. Online channel revenue soared 31.87% to 1.639 billion yuan, driven by customized products. For its foodservice and industrial channels, the company leveraged a flexible supply chain to achieve rapid prototyping and delivery, enhancing customer loyalty through comprehensive flavor solutions.
Digital transformation has become a core growth engine. In 2025, the company's Gaoming base was recognized as the first Lighthouse Factory in the global soy sauce industry. The implementation of technologies such as AI-powered bean selection, big-data-driven intelligent fermentation, and 24-hour spectral detection contributed to a 9.98 percentage point reduction in manufacturing costs for the year. The company allocates approximately 3% of its annual revenue to R&D, with cumulative investment over the past decade exceeding 6.5 billion yuan, solidifying its technological edge.
Capital market initiatives were also notable. In June 2025, HAITIAN FLAVOUR listed on the Hong Kong Stock Exchange, establishing a dual-primary listing structure with A-shares and H-shares and accelerating its international strategy. The company distributed a substantial cash dividend totaling approximately 7.95 billion yuan for 2025, representing a payout ratio of 112.95%, a record high. It has committed to maintaining a cash dividend payout ratio of no less than 80% of annual net profit from 2025 to 2027, providing strong visibility for future shareholder returns.
Bolstered by the strong earnings and generous dividend, HAITIAN FLAV's H-shares surged 7.92% by the market close on March 27, approaching their all-time high, while its A-shares also rose sharply by 7.74%.
Looking ahead, the company plans to continue its user-centric strategy, strengthening product innovation, channel refinement, and digital upgrades. It aims to steadily advance its international expansion while leveraging its strong domestic base to capture new growth opportunities in a competitive market, thereby reinforcing its leading position.
A GF Securities research report highlighted that HAITIAN FLAVOUR boasts a high and stable Return on Equity (ROE) among consumer staples companies. A future rebound in ROE is expected to directly drive an expansion in its Price-to-Book (PB) ratio. The report also noted a shift in the stock's pricing dynamics, with domestic mutual funds and insurance asset managers becoming more influential than foreign investors. Drawing comparisons with leading Japanese and US peers, the report suggests that a recovery in ROE could lead to simultaneous valuation expansion.
Sinolink Securities expressed a positive outlook, noting that HAITIAN FLAVOUR is experiencing balanced growth across multiple product categories and both the business-to-business (B2B) and business-to-consumer (B2C) segments. As market demand becomes more fragmented and diverse, the firm is well-positioned to leverage its existing distribution strengths to expand its product portfolio at the retail level and increase its market share. With the foodservice sector currently in a recovery phase, the company is expected to secure a place in major client supply chains through its customized and cost-effective solutions, paving the way for steady growth.
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