Hygiene products maker Hengan International (1044) reported on Wednesday an 8.7 percent year-on-year decline in profit to 1.25 billion yuan (HK$1.46 billion) in the first half of 2026 amid price competition in the crowded market.
The company maintained an interim dividend at 0.7 yuan per share.
Its total revenue stood at 11.09 billion yuan, 6.1 percent down year-on-year. Revenue from tissue paper slid 5.9 percent to 6.75 billion yuan, accounting for 60.8 percent of the total, and hygiene product business recorded a decline of 2.8 percent to 3.21 billion yuan.
The company saw a decline of overall sales, particularly during the 618 shopping festival. But it was cushioned by low cost pressure with the falling prices of raw materials– wood pulp–and a higher mix of premium high-margin products, driving gross profit up by 2.7 percent, with gross profit margin rising to 35.3 percent.
The operating profit increased by 12.6 percent year-on-year to 1.98 billion yuan, mainly due to the growth of overall gross profit.
Online and new retail channels continued to expand, with their share of sales climbing to 38.3 percent in the first half from 31.8 percent a year earlier, driving a 4.6 percent revenue increase.
Chief executive Hui Ching-lau said the company will prioritize sustaining current scale at home and stepping up brand-building efforts against intense competition rather than aggressively chasing market share.
In the next half year, more channels would spring up as supermarkets are producing and promoting their own products, which could be one of the challenges the company is bracing for, Hui said.
As sales of legacy products declined while those of newly‑launched products rose, the company has planned to take a measured approach to upgrading these established lines, he added.
On international business development, the company’s Wang-Zheng business in Malaysia saw a steady development during the period, with turnover rising by 7.7 percent to 277.8 million yuan. It also eyes Southeast‑Asian markets with cultural affinities to China, such as Singapore, for expansion, the company said.
The full-year revenue is expected to stay stable, supported by the continued increase in premium high-margin product mix, brand rejuvenation and omni-channel sales optimization, it added.
Shares of Hengan International closed 1.26 percent higher at HK$24.12 on Wednesday.
Frank Feng
