Annual net profit less than 100 million yuan, where is the root cause of the profit decline for A-share "Coconut Juice No. 1"?

Ask AI · Does shareholder selling off reflect concern about the company’s outlook?

In 2025, Huanlejia’s performance continued the downward trend from the previous year: revenue declined 19.11% year over year to RMB 1.500 billion, and the net profit attributable to the parent fell below the RMB 100 million scale, down 70.03% year over year to RMB 44.1746 million.

Investment time.com · Punctuation Finance research analyst Lü Gong

In 2025, Huanlejia Food Group Co., Ltd. (hereinafter referred to as “Huanlejia,” 300997.SZ) delivered a “scorecard” marked by both revenue and net profit decline. During the year, operating revenue fell 19.11% year over year to RMB 1.500 billion, while net profit attributable to the parent dropped to below the RMB 100 million scale, down 70.03% year over year to RMB 44.1746 million; the gross margin was 29.59%, down 4.41 percentage points year over year. A-share “the first coconut-juice stock” Huanlejia’s performance has now been declining for the second consecutive year.

In response to the downward performance trend, Huanlejia made corresponding explanations. The company said that the decline in revenue from distribution channels is an important reason for the pressure on performance, mainly driven by multiple factors including a sluggish consumption environment and increasingly fierce industry competition. Regarding the year-over-year decline in gross margin, Huanlejia explained that, on the one hand, it was due to adjustments in product mix; on the other hand, because the company added a snack specialty chain channel layout and carried out sales of coconut-based ingredient primary processing (cold-pressed coconut meat sauce), among other businesses. The gross margin of the above channels and businesses is relatively low by itself; however, this situation is also consistent with the industry characteristics of the corresponding channels and the actual operating needs.

In terms of channels, Huanlejia mainly operates through a distribution model. In 2025, sales revenue under this model accounted for more than 80% of the company’s share of main business. Under this model, Huanlejia sells its products directly to distributors via a buyout arrangement; then the distributors sell to wholesalers or retail endpoints; and finally the retail endpoints sell to consumers.

However, in 2025, both revenue, gross margin, and the number of distributors under Huanlejia’s distribution model decreased year over year. Specifically, revenue under this model achieved only RMB 1.103 billion, down 26.95% year over year, and gross margin decreased by 3.06 percentage points year over year to 33.97%. As of the end of 2025, the total number of distributors distributed across regions including Central China, Southwest China, East China, Northwest China, North China, and others was only 1,962. Compared with the total number at the beginning of the period (as of January 1, 2025), this represented a decrease of 274.

In addition, in 2025, Huanlejia’s other sales channels—such as agency sales, direct operations, and other models—also saw declines compared with the previous year, with the decreases of 25.33% and 44.15%, respectively. Meanwhile, although the snack value-for-money retail chain channel that the company began exploring in recent years has shown strong momentum—its 2025 revenue increased 52.06% year over year to RMB 175 million—the gross margin of this channel during the year fell by 3.04 percentage points from the previous year, showing a pattern of increased volume but not increased profit.

Revenue, costs, gross margin, and year-over-year changes under different sales models for Huanlejia in 2025

Data source: the company’s financial reports

One of the main factors behind Huanlejia’s continued performance decline is also weak and lackluster core business. Huanlejia’s products mainly include two categories: beverage products and canned food. Among them, fruit canned goods (especially orange canned goods and yellow peach canned goods as representative products) and coconut juice are core products of the company, enjoying a relatively high level of market recognition in the industry. Judging from the revenue structure, these two categories account for more than 80% of the company’s total annual revenue.

Since 2024, both Huanlejia’s revenue and gross margin for fruit canned goods and coconut-juice beverages have shifted from growth to decline. By 2025, the revenue declines for both further widened: coconut-juice beverage revenue declined 21.51% year over year, and fruit canned goods revenue declined 19.96% year over year; during the year, the gross margins of the two aforementioned categories decreased by roughly 3 percentage points each year over year. In 2025, the company’s other beverage and other canned goods segments also saw declines in the double-digit range, with decreases of 35.65% and 37.46%, respectively.

Fluctuations in raw material prices also add some pressure on Huanlejia. In 2025, due to factors such as climate change leading to reduced output and supply, the procurement unit prices for cold-pressed coconut meat sauce,-season yellow peaches, and strawberry meat increased by more than 30% year over year. Among them, yellow peach canned goods are one of the representative products in the company’s fruit canned goods. This price fluctuation increased Huanlejia’s full-year production costs by RMB 38.5301 million.

Huanlejia’s revenue, net profit attributable to the parent, and year-over-year changes in recent years

Data source: the company’s financial reports

What is worth noting is that during the period of sustained performance decline, several of Huanlejia’s shareholders have reduced their holdings one after another to cash out.

Since July 2025, one of the company’s actual controllers and the current chairman Li Xing has reduced his holdings of some shares three times via a negotiated transfer mechanism. The total cashing-out has been nearly RMB 400 million; the most recent transaction was completed in March 2026, when Li Xing transferred 10.9368 million shares he held at a price of RMB 17.34 per share.

In September 2025, Huanlejia shareholder Maoxing Consulting transferred 5.859 million shares of the company at a price of RMB 15.33 per share. The shareholding ratio fell from 5.60% to 4.26%, dropping below 5%. The transferor was an employee shareholding platform of the company for which the company employee platform executive affairs partner is concurrently held by Wu Su Min, the company’s deputy general manager and chief financial officer.

At the end of December of the same year, Huanlejia’s controlling shareholder Haoxing Investment, actual controller Li Xing, and Zhu Wenzhen reduced their combined holdings of 9.376 million shares of the company via a negotiated transfer mechanism. The transfer price was RMB 19.43 per share. It is reported that Li Xing and Zhu Wenzhen are spouses, holding 59.95% and 39.97% of the equity in Haoxing Investment, respectively.

Recently, Huanlejia’s share price has been experiencing significant volatility. In November and December 2025, the company’s share price generally rose from under RMB 20 per share (based on pre-rights adjustment, same as below) to above RMB 30 per share, reaching a peak of RMB 34.57 per share on December 19, 2025. But since mid-January 2026, the share price has again entered a downward channel; by the market close on March 30, 2026, it had fallen back to around RMB 20 per share.