On April 22, H&H International Holdings Limited (01112) released its unaudited operational data for the first quarter of 2026. The company continued its high-quality growth trajectory from 2025, with revenue increasing by 33.8% year-on-year to RMB 4.26 billion. While revenue scale expanded steadily, all three core business segments showed positive performance. More significant than the sheer growth in scale was the simultaneous improvement in growth structure and quality, with the core growth logic continuing to materialize. Nutritional supplements contributed 59.9% of total revenue, serving as the primary engine for the group's growth. Vitamins, herbal and mineral supplements, infant and child probiotics, children's nutritional products, and pet nutrition all achieved robust double-digit growth, demonstrating a stable pattern of synergistic growth across all categories. The group maintained healthy cash flow and profitability, coupled with ongoing deleveraging, optimized capital structure, debt reduction, and ample cash reserves, providing solid support for business expansion, R&D innovation, and channel development, thereby highlighting the quality of its growth.
All three core businesses advanced together, with key brands leading their respective segments. The growth observed this quarter was not driven by short-term stimuli but was built on the sustained output of the product and R&D systems. The Adult Nutrition and Care (ANC) business reported revenue of RMB 1.931 billion for the quarter, a year-on-year increase of 24.2%, driven by the continued release of growth momentum from multiple global markets. Notably, the Swisse brand performed strongly in the Chinese mainland market, growing by 33.5%, with rapid breakthroughs in emerging channels such as Douyin and offline new retail. This success was not merely due to channel expansion; sub-brands like Swisse PLUS and little Swisse made significant contributions to growth, supported by precise insights into global consumer demand. By targeting more specific usage scenarios, rapidly iterating innovative products, and increasing R&D investment, the company has built barriers for long-term stability.
In the core Baby Nutrition and Care (BNC) segment, growth momentum was particularly strong in the first quarter. The business generated revenue of RMB 1.835 billion, surging 60.9% year-on-year. Infant formula milk powder business in the Chinese mainland grew 74.4% year-on-year, significantly outperforming the industry, with market share steadily rising. Combined with a 20.4% growth in infant probiotics and children's nutritional products in the Chinese mainland, this reflects the company's deep expertise in the maternal and child nutrition sector. More importantly, the company has established a technological system around core ingredients such as HMO and LPN, and recently successfully launched a new HMO infant formula. H&H indicated that as the first infant formula containing Human Milk Oligosaccharides (HMOs) in the market, it is expected to be a key growth driver in the future. This signifies that product iteration capability is becoming a core variable driving growth, rather than relying solely on channel advantages. Leveraging strong brand power, technological moats, and continuous product innovation, the long-term growth logic for this business is clear, steadily opening up future growth potential.
Regarding the pet business, although the Chinese market was temporarily affected by localization adjustments, the North American market maintained 16.3% growth, with the premiumization trend continuing to materialize. Simultaneously, the launch of the self-developed "feline-source probiotic" product reflects that the company's R&D investments in the pet nutrition sector are beginning to yield returns. Overall, H&H's current product strategy has shifted from "category coverage" to "R&D-driven," which is crucial for the sustainability of medium to long-term growth.
H&H Group's financial health continued to improve in the first quarter, with the deleveraging process significantly exceeding expectations. The group proactively optimized its liability structure, reducing total debt by over RMB 300 million compared to the end of 2025. By utilizing internal working capital to prepay a large US dollar term loan ahead of schedule, it effectively lowered overall financial risk. As of March 31, the company's cash reserves exceeded RMB 2.1 billion, indicating ample and solid cash flow. As deleveraging continues and the financial structure steadily improves, this financial optimization holds dual core investment value: on one hand, the rational contraction of debt scale will continue to reduce interest expenses, gradually releasing profit flexibility and earnings potential; on the other hand, financial uncertainty is significantly weakened, enhancing operational stability, which is expected to promote a reasonable reassessment of the company's valuation framework.
Overall, H&H's current development path exhibits a clear "dual-engine" characteristic: driving business expansion through product innovation and channel deepening on one side, while enhancing operational quality by optimizing the capital structure on the other. Amid a backdrop of diverging consumer environments and increased market volatility, H&H Group continues to adhere to its core strategy of "growth priority, healthy profitability, and continuous deleveraging." Its long-term performance will depend more on the sustained and orderly realization of its current fundamentals. Precisely because of this, the current market's valuation framework, which is relatively conservative, may not fully reflect its composite characteristics of "defensiveness + growth potential." As the fundamentals continue to materialize, this cognitive discrepancy could potentially be corrected.
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