The African diaper market leader, SoftCare, has maintained robust growth momentum following its public listing. On July 21st, the company issued a positive profit alert, forecasting first-half 2026 revenue of no less than $328 million, representing a year-on-year increase of at least 28%. Profit is expected to be no less than $73 million, marking a rise of at least 40%. For the full year 2025, SoftCare achieved revenue of $567 million, up 24.9% year-on-year, and a profit of $121 million, a 27.4% increase. The latest guidance indicates an acceleration in both revenue and profit growth rates for the first half of this year compared to the previous full year.
SoftCare primarily serves markets in Africa, Latin America, and Central Asia, selling baby diapers, training pants, sanitary napkins, and wipes. Based on 2024 sales volume, the company holds the top position in both the African baby diaper and sanitary napkin markets, with market shares of 20.3% and 15.6%, respectively. The revenue growth in the first half of this year was driven by a combination of increased sales volume and a higher average selling price.
The company continues to deepen its sales channels and optimize its production footprint, exporting products from core markets like East and West Africa to neighboring countries while expanding its presence in Latin America, thereby boosting overall sales volume. The increase in average selling price is partly attributable to significant currency exchange factors. Compared to the same period last year, the currencies of its operational regions, such as the Ghanaian cedi, Zambian kwacha, West African CFA franc, and Central African CFA franc, have strengthened against the US dollar, elevating product prices when converted to USD.
Profit growth was primarily fueled by the expansion of sales scale, increased bank interest income, and reduced listing-related expenses, though this was partially offset by foreign exchange losses. Excluding listing expenses and foreign exchange gains or losses, SoftCare still expects its adjusted net profit for the first half to grow by at least 47%.
Key Market and Product Focus
Africa remains the cornerstone of SoftCare's revenue. In 2025, East Africa, West Africa, and Central Africa contributed 45.1%, 40.7%, and 10.2% of the company's revenue, respectively, collectively accounting for 96% of the total. On the product side, the business heavily relies on infant care, which constituted 78.6% of revenue.
Several brokerages attribute the company's growth foundation in Africa to low market penetration, localized production, and deep distribution. By establishing local factories, sourcing globally, and penetrating deeper into distribution channels, SoftCare has managed to lower costs, creating a price advantage relative to international brands.
Expansion Strategy and Future Challenges
The focus for the next phase is to replicate this successful model beyond Africa. Analysis suggests that SoftCare adopts an "export first, build factory later" expansion path, initially validating demand through exports and channel presence before establishing local production to reduce tariffs, transportation costs, and delivery times. Markets like Peru and El Salvador in Latin America may become a second growth engine. However, it remains to be seen whether new production capacity can be deployed as scheduled and if local channels can achieve the same depth of coverage as in African markets.
SoftCare is also preparing funds for capacity expansion. The company's net IPO proceeds amounted to approximately HK$2.229 billion, of which HK$1.835 billion is earmarked for expanding production capacity and upgrading production lines. These funds remained unused as of the end of 2025 and are planned to be utilized by the end of 2029.
As its operational regions expand, the currency risks associated with dealing in multiple currencies have become more pronounced. In June of this year, SoftCare entered into three forward foreign exchange contracts, selling a total of €29.9 million and buying $34.694 million to hedge against currency fluctuations on its foreign currency assets.
Looking ahead, beyond currency fluctuations, SoftCare will need to navigate risks including raw material price volatility, the complexity of cross-border management, and intensifying market competition. Furthermore, whether the new production capacity can be absorbed by genuine demand will ultimately determine the success of replicating its African growth story in Latin America.
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