Hengan International (1044) saw its annual net profit fall by 28 percent to 3.27 billion yuan (HK$4 billion) amid higher costs for wood pulp. That led to a fall in its shares.
The mainland's largest producer of hygiene products proposed a final dividend for the year to December 31 of 0.70 yuan per share, amounting to a total dividend of 813 million yuan - 46 percent lower than 2020.
Earnings per share dropped to 2.78 yuan, or a 27.9 percent reduction.
The pressure on the company's profits led to a reduction in the company's government grants calculated by tax paid during the year coupled with the relatively stable exchange rate of the yuan against the US dollar.
That resulted in a significant decrease in foreign exchange gains compared to the previous year.
The company's tissue paper business decreased by 5.2 percent to 9.84 billion yuan while sales of sanitary napkins recorded a decline of 8.1 percent to 6.11 billion yuan.
That came with sales channels becoming more fragmented and competitors adopting aggressive pricing strategies to seize market share.
There was also a drop in the disposable diaper business by about 14.5 percent, falling to 1.22 billion yuan.
But strong e-commerce development in 2021 saw sales through online channels soar by over 10 percent to approximately 4.8 billion yuan.
