A major player in the spicy snack industry, WL DELICIOUS (09985.HK), has drawn attention after a shipment of imported raw materials was denied entry into the country.

On September 1st, the Import and Export Food Safety Bureau of the General Administration of Customs disclosed food items that failed to gain entry approval for July 2026. Among them, 162 tonnes of konjac powder imported by Henan WL Food Enterprise E-commerce Development Co., Ltd., a subsidiary of WL DELICIOUS, were intercepted at the Qingdao port. The shipment, originating from Indonesia, was found to have sulfur dioxide levels exceeding the limit set by the GB 2760-2024 standard, which does not comply with national food safety regulations.

Public records show the overseas manufacturer of this konjac powder batch is PT Banshang Technology Jawa Timur (referred to as "Banshang") based in Indonesia. Notably, WL DELICIOUS' annual report mentions a company with a strikingly similar name.

According to its 2024 annual report, WL DELICIOUS acquired a 100% interest in PT Banshang Technology Jawa Timur (referred to as "Malaysia Banshang"), established in Malaysia, from an independent third party in June 2024, for a transaction price of 28 million yuan. Malaysia Banshang is primarily engaged in the initial processing of konjac raw materials and has a registered capital of 10 billion Indonesian rupiah.

In the annual report, WL DELICIOUS stated that this acquisition was part of its business support strategy. As of the end of December 2025, WL DELICIOUS holds a 90.50% stake in Malaysia Banshang, consistent with its shareholding at the end of 2024. Malaysia Banshang is now listed as one of WL DELICIOUS' main subsidiaries.

Regarding this incident of raw materials being denied entry, WL DELICIOUS customer service responded to media on September 12th: "This batch of raw materials has been returned according to regulations, was not used in any WL DELICIOUS products, and is unrelated to the company's products on sale."

The significant attention to this event is also linked to the growing importance of konjac raw materials in WL DELICIOUS' current operations. Public information indicates that when a small amount of sulfur dioxide enters the human body, it converts to sulfate and is excreted through urine. However, if intake exceeds the body's normal metabolic capacity, it can cause discomfort such as coughing and wheezing, and may trigger allergic reactions. Therefore, the sulfur dioxide content in food raw materials must adhere to relevant national standards.

From a performance perspective, WL DELICIOUS' fundamentals have continued to grow in recent years. In 2025, the company achieved revenue of 7.224 billion yuan, a year-on-year increase of 15.3%, and a net profit of approximately 1.427 billion yuan, up 33.6% year-on-year. In the first half of 2026, WL DELICIOUS reported revenue of 3.715 billion yuan, a 6.7% year-on-year increase, and a net profit of 766 million yuan, up 4.0% from the previous year.

It is worth mentioning that WL DELICIOUS is no longer a company solely reliant on spicy strips. Konjac snacks are becoming an increasingly vital revenue source. In the first half of 2026, revenue from seasoned flour products, represented by spicy strips, was 1.181 billion yuan, a year-on-year decrease of 9.8%, with its revenue share dropping from 37.6% to 31.8%. During the same period, vegetable products, led by Konjac爽, generated 2.441 billion yuan in revenue, a 15.8% increase year-on-year, boosting their revenue share to 65.7%, now exceeding 60% of the company's total revenue.

In other words, while spicy strips remain WL DELICIOUS' most recognizable product, konjac-based products have clearly risen in importance within its revenue structure. The raw material intercepted by customs this time is also konjac powder.

Founded in Luohe, Henan in 1999, WL DELICIOUS officially listed on the Hong Kong Stock Exchange on December 15, 2022, becoming the "First Spicy Strip Stock," but its shares fell below the issue price on the very first day of trading. Subsequently, the company's stock price remained low for an extended period, once declining to 4.199 HKD in 2024. In 2025, the share price briefly rebounded to above 17 HKD, but weakened again after the release of the 2024 annual report, falling below the IPO price. As of the close on September 15th, WL DELICIOUS shares were priced at 6.925 HKD, down 2.12%, with a total market capitalization of approximately 16.83 billion HKD. Year-to-date, the company's stock price has fallen by 37.16%.