In the first half of 2025, Beingmate Co.,Ltd. delivered mixed results with declining revenue but growing profits. The company reported revenue of 1.355 billion yuan, down 4.37% year-over-year, while net profit attributable to shareholders reached 74 million yuan, up 43.68%.
The underwhelming performance stems primarily from the company's heavy dependence on infant formula products, which faced sales pressure. Although other product categories like rice cereal and baby care products showed impressive growth rates, their low contribution to overall sales limited their impact on total performance. Additionally, the company's marketing expenses continued to rise, with selling expense ratio approaching 30%, yet failed to drive corresponding revenue growth.
Notably, following the government's announcement of nationwide direct cash subsidies for childcare families to reduce child-rearing costs, consumers have questioned whether certain mother-and-baby brands raised prices in response. Beingmate was among the brands facing such scrutiny.
**Core Business Under Pressure: Formula Sales Decline Drives Revenue Drop**
Founded in 1992, Beingmate Co.,Ltd. specializes in research, development, production and sales of infant formula, nutritional rice cereal, and other baby food and nutritional products. As one of the few domestic formula brands that tested negative for melamine contamination, the company once held the top market share among domestic formula brands and became the "first domestic formula stock" when it went public in 2011. However, under competitive pressure from rivals including China Feihe, Danone and international brands, Beingmate has gradually lost market share. According to Euromonitor data, Beingmate's share of China's overall infant formula market was only 1.6% in 2022, far below its peak period.
In H1 2025, the company's 4.37% revenue decline to 1.355 billion yuan was primarily attributed to falling formula sales. While rice cereal and baby care products showed remarkable growth, their low proportion of total sales provided limited boost to overall performance.
During the reporting period, formula products generated revenue of 1.209 billion yuan, down 4.43% year-over-year, accounting for 89.2% of total revenue. Rice cereal products contributed 48 million yuan, up 33.13%, representing 3.54% of revenue. Baby care products reached 23 million yuan, surging 184.66%, but only accounting for 0.57% of revenue.
The infant formula market is primarily driven by birth rates. China's birth rate has been declining in recent years, though the absolute number of newborns remains considerable in the short term. While the two-child and three-child policies have somewhat moderated the declining birth rate trend, they haven't reversed the significant drop from peak birth numbers. Consequently, combined with factors including declining newborn numbers and intense industry competition, China's infant formula market has contracted from 172.5 billion yuan in 2021 to approximately 142 billion yuan in 2024, with Beingmate's core infant formula sales declining accordingly.
Production and sales data also reflect this trend, with the company's formula sales volume falling 6.04 percentage points year-over-year in H1 2025, likely related to weak infant formula demand and intense market competition.
Furthermore, the company's growing marketing expenses appear unable to drive corresponding revenue growth. H1 2025 selling expenses reached 399 million yuan, up 7.98% year-over-year, with selling expense ratio hitting 29.48%. Despite massive marketing spending, revenue declined 4.37% while selling expenses grew 7.98%. The company's "maintain 5% profit margin" slogan may lead many consumers to believe Beingmate products have high costs, yet the company allocates nearly 30% of revenue to marketing.
**Pricing Controversy Following National Childcare Subsidies**
To help reduce family child-rearing costs, the government announced nationwide direct cash subsidies for childcare families. Starting January 1, 2025, families can receive 3,600 yuan annually for each child regardless of birth order until age three, expected to benefit over 20 million infant and toddler families annually.
However, before the childcare cash subsidies were even distributed, consumers noticed price increases for various well-known formula, diaper, and baby food brands, including Beingmate products.
On social media platforms, numerous consumers reported higher prices for mother-and-baby products following the subsidy announcement, suspecting brands were capitalizing on the national policy. Beingmate formula was among the products mentioned. One consumer noted that Beingmate Love Plus 6-12 month Stage 2 formula previously cost 1,145 yuan per case (6 cans), or 191 yuan per can. Shortly after the national subsidy policy announcement, the same product increased to 1,392 yuan per case (6 cans), or 232 yuan per can. The customer provided purchase receipt screenshots showing the 1,145 yuan per case price from Beingmate's official JD.com flagship store.
Addressing pricing controversy following subsidy announcements, Beingmate emphasized through various channels including social media and investor platforms that "no products have increased in price" and pledged to "maintain 5% profit margin." The company attributed apparent price changes to platform subsidy reductions (such as Pinduoduo's "billion subsidy" program ending) rather than corporate price increases. For example, a 230 yuan formula with promotional coupons for 191 yuan would return to original price when promotions ended, creating a "false price increase" perception.
Whether Beingmate's platform subsidy reductions following national childcare subsidy announcements were coincidental remains unclear, but this incident may reflect underlying issues with the company's channel pricing strategies.
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