Hengan Group Achieves Revenue of RMB 11.808 Billion in The First Half of 2025

Hengan Group Achieves Revenue of RMB 11.808 Billion in the First Half of 2025

On August 21, Hengan International Group Company Limited released its half-yearly report for 2025. The report shows that in the first half of 2025, the company's revenue was approximately RMB 11.808 billion, which is basically flat compared to the same period last year. The net profit attributable to the shareholders of the listed company was about RMB 1.373 billion, a decrease of 2.6% compared to the same period last year.

In the first half of 2025, facing the complex and severe domestic and international situation, the group actively enhanced its comprehensive competitive advantage, focused on profitability, promoted product high-end and category diversification, deepened the full-channel sales layout, and continuously improved market share, achieving steady and long-term business development.

Tissue and Wet Wipes Business

Under the guidance of the "brand leadership" strategy, the group's tissue and wet wipes business continuously enhanced product power and channel competitiveness. Sales have been growing since the fourth quarter of last year. With the continuous increase in the sales ratio of high-end tissue and wet wipes, the group's tissue and wet wipes business sales revenue increased by about 3.2% year-on-year to RMB 7.174 billion, accounting for about 60.8% of the group's total revenue.

In the first half of the year, the price of wood pulp was relatively low, and the cost pressure of tissue paper was relatively low. With the reduction of promotional expenses and the steady increase in the sales ratio of high-end and high-profit products, the group's tissue and wet wipes product gross profit margin increased to about 21.9% (compared to 19.6% in the first half of 2024).

Among them, the increasing requirements of consumers for product efficacy and experience have driven the continuous increase in demand and penetration rate of high-quality and innovative domestic wet wipes. The group continued to expand the wet wipes market, with wet wipes sales increasing significantly by 34.7% to RMB 797 million in the first half of the year, increasing the proportion of wet wipes sales in the tissue and wet wipes business to about 11.1%, becoming another growth engine for the group's sales.

Hygiene Products Business

The group's hygiene products business (including sanitary napkins and diapers) sales revenue fell by about 14.4% to approximately RMB 3.304 billion in the first half of 2025, accounting for about 28.0% of its total revenue. However, compared with the second half of last year, it increased by about 7.3%, reflecting that the situation this year has improved.

During the reporting period, the group's high-end sanitary napkin product "Tianshan Cotton" series, with its excellent quality and brand image, continued to be favored by consumers, achieving a significant sales increase of 26.4% in the first half of the year. The female sanitary pants series still has great growth potential. In the first half of the year, sales reached approximately RMB 310 million, a year-on-year increase of about 8.0%. The group will continue to actively promote the female sanitary pants series, including the upgraded version of "Mengshui Pants," to increase the penetration rate of high-end products.

In addition, the high-end diaper product "Q•MO" achieved steady sales growth in the period, with sales reaching RMB 340 million, a year-on-year increase of about 6.6%. The group's adult diaper business benefited from the growing domestic adult incontinence products market size and the continuous increase in the penetration rate of adult diapers, with sales continuing to rise.

However, the domestic competition in sanitary napkins and diapers is becoming increasingly fierce, with domestic brands using aggressive promotional strategies to seize market share, especially in the e-commerce channel, which has impacted the sales of the group's sanitary napkin products and mid-to-low-end diaper products.

In the first half of the year, the significant decline in the sales of sanitary napkin products, combined with the increase in the price of raw material pulp, led to the group's hygiene products business gross profit margin falling to about 57.3% in the first half of 2025 (compared to 59.5% in the first half of 2024).

E-commerce and New Retail Channels

To meet the increasingly upgraded consumer demand, the group continuously innovates and optimizes its e-commerce and other new retail channels, following market trends to seize business opportunities.

In the first half of 2025, the group's e-commerce and new retail channels (including Retail Pass and New Pass) sales revenue increased by about 7.9% to RMB 4.06 billion, maintaining a strong development momentum, with the proportion of the group's total sales rising to about 34.4%. Among them, the sales contribution of e-commerce and new retail channels to the tissue and wet wipes business and hygiene products business was about 40.5% and 32.5%, respectively.

The group will closely follow the new consumption patterns and trends of e-commerce and new retail channels, continue to vigorously expand e-commerce brand flagship stores and emerging channels, and improve the data analysis capabilities for end customers.

International Business Development

International business development revenue mainly includes finished and raw paper export business, medical products business, and the business of Wang-Zheng Berhad in Malaysia. In the first half of 2025, the total revenue was approximately RMB 742,347,000 (compared to RMB 773,157,000 in the first half of 2024), accounting for about 6.3% of the group's total sales (compared to 6.5% in the first half of 2024). Among them, the income from finished and raw paper export business and medical products was RMB 422,301,000 and RMB 62,102,000, respectively.

The business of Wang-Zheng Berhad in Malaysia, under the group, developed steadily during the period, with turnover of RMB 257,944,000 (compared to RMB 214,540,000 in the first half of 2024), a year-on-year increase of about 20.2%, accounting for about 2.2% of the group's total sales (compared to 1.8% in the first half of 2024). The group uses Hengcheng Group in Malaysia as a base to bring Hengan tissue and adult diapers into the Southeast Asian market through Hengcheng.

The group plans to continue to upgrade existing Wang-Zheng Berhad products, develop and launch more high-quality Wang-Zheng Berhad brand products, and further increase the market share in Malaysia and even the Southeast Asian market in the future.

Future Outlook

To meet the continuous consumption upgrade and diversification trend of domestic hygiene products and meet the growing demand of consumers for high-end and segmented products, Hengan Group plans to carry out capacity expansion and technology upgrade plans in the future, which will implement projects such as Chongqing Phase III and Hubei Phase II to further expand the capacity of tissue and wet wipes.

Looking to the future, the group will continue to adhere to the "focus on the main business, brand leadership, long-termism" strategy. In the process of deeply cultivating the two core businesses of tissue and wet wipes and hygiene products, it will adhere to the "brand leadership" strategy, continuously enhance the brand image, and take long-termism as the orientation. Actively develop and upgrade high-quality products and expand new markets to further expand the scale of Hengan's business and lead the Hengan brand to the international stage step by step.