TINGYI (00322, HK) has reported a rare year-on-year decline in revenue while simultaneously posting a significant increase in net profit attributable to shareholders. This performance indicates that reducing product costs and raising retail prices can still yield favorable results. However, the slowdown in its core business remains a pressing concern.
The company officially released its 2025 annual report on April 27. A notable highlight was the rare year-on-year decline in revenue, the first such occurrence in nearly nine years.
According to the report, revenue for 2025 was RMB 79.07 billion, down 1.96% from RMB 80.65 billion in 2024. Data from iFind shows this marks the company's first annual revenue decline since 2017. In fact, revenue growth in 2024 was only 0.29%, which somewhat foreshadowed the weakness in 2025.
Despite this, TINGYI's gross profit continued to grow year-on-year, reaching RMB 27.53 billion in 2025, up 3.13% from RMB 26.7 billion in 2024. The most impressive figure among key indicators was the net profit attributable to shareholders, which surged 20.52% to RMB 4.501 billion in 2025, compared to RMB 3.734 billion in 2024, marking the highest growth rate in nearly five years.
On April 27, TINGYI's Hong Kong stock price initially fell but later recovered, dropping over 2% during the session before closing up 0.08% at HK$12.46 per share, with a total market capitalization of HK$70.2 billion.
Regarding the revenue decline, TINGYI did not specify reasons but noted a 2.9% decrease in beverage revenue. For the substantial profit growth, the company attributed it to an improvement in gross margin, which rose 1.7 percentage points year-on-year to 34.8% for the year.
Breaking down revenue by product category, instant noodle sales remained largely flat compared to 2024, with their share of revenue slightly increasing to 35.9%. Therefore, the decline in 2025 revenue was primarily driven by a drop in the company's largest revenue contributor—the beverage segment. The annual report shows that beverage revenue, accounting for over 60% of total revenue, decreased noticeably by RMB 1.498 billion, down 2.9% year-on-year.
Historically, the beverage business has been TINGYI's growth engine. From 2021 to 2024, beverage revenue growth rates were 20.18%, 7.89%, 5.39%, and 1.34% respectively, maintaining positive growth for four consecutive years, while instant noodle performance was volatile during the same period. By 2025, the situation reversed, with the beverage segment's slowdown directly causing the company's overall revenue contraction.
However, pressure on beverage growth is not unique to TINGYI. Its largest competitor, Uni-President, saw beverage revenue grow only 1.2% year-on-year in 2025, a sharp decline of 7 percentage points from 2024. Analysts suggest this is due to market share being gradually eroded by the freshly made tea and freshly ground coffee segments.
Furthermore, while TINGYI has long been regarded as the leader in the beverage industry, the landscape shifted in 2025: Nongfu Spring reported revenue of RMB 52.553 billion, surpassing TINGYI's beverage revenue of RMB 50.123 billion, increasing pressure on TINGYI.
In analyzing the reasons for the substantial rise in net profit, TINGYI emphasized "favorable raw material prices." From a profit perspective, this primarily means lower costs for key raw materials. TINGYI's core raw materials include palm oil, PET resin, sugar/fructose, and flour. Data indicates that prices for these materials fell by single-digit percentages in 2025.
Lower raw material costs directly led to an increase in TINGYI's product gross margins. The annual report shows that the gross margin for instant noodles rose 1.1 percentage points year-on-year to 29.7%, with its contribution to net profit surging 10.1% to RMB 2.252 billion. The beverage segment's gross margin improved more significantly, up 2.2 percentage points to 37.5%, with its contribution to net profit increasing 18.5% to RMB 2.274 billion.
Data shows that the notable rise in TINGYI's gross margin resulted from a combination of lower costs and product price hikes. In the first half of 2024, TINGYI increased retail prices for its beverages and instant noodles. The effect was immediate: the annual report indicates TINGYI's gross margin reached 34.8% in 2025, up 1.7 percentage points from 2024, hitting a new high in recent years.
It is noteworthy that TINGYI's first revenue decline in nearly nine years presents an immediate major challenge for the company's newly appointed CEO. The annual report specifically mentioned that the Group's Chief Executive Officer position transitioned smoothly in early 2026. The new management team has taken over and has adopted the slogan "Back to Day 1."
The report indicates that the new CEO is 43-year-old Wei Hongcheng, who succeeded Chen Yingrang, who retired after his contract expired. Chen had served as CEO since 2021. Wei Hongcheng became a director of TINGYI Beverages in 2015 and has served as chairman since 2019.
Wei Hongcheng is also the younger brother of 48-year-old Group Board Chairman Wei Hongming. Both are sons of TINGYI's core founder. The company was founded by the four Wei brothers from Taiwan: Wei Yingzhou (the eldest), Wei Yingjiao, Wei Yingchong, and Wei Yingxing, with Wei Yingzhou being the key leader.
TINGYI entered the mainland China market in 1992, establishing its position as the "King of Noodles in China" with its Braised Beef Flavor Instant Noodles. By 1995, it had formed a dual-core business of instant noodles and beverages. The company was listed on the Hong Kong Stock Exchange in 1996. Wei Yingzhou retired in 2018, succeeded by his eldest son, Wei Hongming. Now, with the third son, Wei Hongcheng, appointed CEO, TINGYI has established a stable structure of family control, second-generation management, and support from professional managers.
The market is watching closely to see if Wei Hongcheng can steer TINGYI out of the cycle of profit growth without revenue expansion.
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