Rising costs, surging expenses, and a shift in sales channels are collectively squeezing the profitability of WANT WANT CHINA. The company disclosed its annual results for the period ending March 31, 2026. During the reporting period, the company achieved revenue of RMB 24.401 billion, a year-on-year increase of 3.8%, with sales volume achieving high single-digit growth. However, profit attributable to equity holders was RMB 3.837 billion, a decrease of 11.5% compared to the previous year.

A combination of higher raw material costs, increased expenses following organizational restructuring, and greater investment during the transition between old and new sales channels compressed profit margins. On the cost side, influenced by rising unit consumption costs for imported whole milk powder and palm oil, the company's gross profit margin fell from 47.6% in the previous fiscal year to 46.3%, a decline of 1.3 percentage points.

Key Internal Pressures

Compared to external inflationary pressures from raw materials, the sharp increase in operating expenses resulting from internal organizational restructuring was a more significant internal driver of the decline in operating profit. In fiscal 2025, WANT WANT CHINA's distribution costs grew by 16.9% year-on-year to RMB 3.540 billion, raising their proportion of revenue to 14.5%. Administrative expenses increased by 11.4% to RMB 3.352 billion, accounting for 13.7% of revenue.

The company had previously reorganized its product categories and established new product divisions accordingly. Following this organizational split, the number of corresponding positions increased, leading to a simultaneous rise in personnel expenses. This resulted in an 8.9% year-on-year increase in total employee compensation for fiscal 2025. Additionally, to enhance awareness of new and segmented products among different consumer groups, WANT WANT CHINA ramped up its investment in marketing and cross-promotional activities. The ratio of advertising and promotion expenses to revenue reached 3.8% during the reporting period, up 1.1 percentage points year-on-year.

Performance Across Core Categories

Examining the performance of its major products, WANT WANT CHINA still relies on its core categories for foundational support, but growth momentum is beginning to diverge. Dairy and beverages remain the largest revenue source. In fiscal 2025, this segment generated revenue of RMB 12.343 billion, up 1.9% year-on-year, accounting for approximately 51% of total revenue. Within this, Want Want Milk, affected by overall softness in the dairy market, saw a slight revenue decline of 0.3%. As the company's most important flagship product, Want Want Milk still holds fundamental significance, but its ability to drive growth as a single blockbuster product is not as strong as before.

The rice cracker category generated revenue of RMB 5.936 billion, up 0.5% year-on-year, with low single-digit volume growth. The leisure food category achieved revenue of RMB 5.915 billion, a 10.4% increase, making it the best-performing segment among the three major categories, with double-digit volume growth. The candy sub-category achieved low double-digit revenue growth for the full year, reaching a historical high. Sub-categories including ice products, snack cakes, beans, jelly, and others also saw growth ranging from high single digits to low double digits.

Channel Shift Underway

The change in category structure is essentially a result of shifting channel focus. In fiscal 2025, revenue from traditional wholesale and modern channels, which account for nearly 70% of WANT WANT CHINA's total revenue, declined by a high single-digit percentage year-on-year. Meanwhile, snack discount stores and emerging channels have rapidly filled the gap, now accounting for approximately 15% of total revenue. Online and other emerging channels have also become sources of incremental growth. The financial report indicates that revenue from emerging channels such as e-commerce and OEM grew by double digits year-on-year, reaching a low double-digit percentage of total revenue.

While the direction of channel adjustment is clear, the short-term effect is still reflected in rising expenses and falling profit margins. In his letter to shareholders, Chairman Tsai Eng-meng candidly stated that the group's "Capture Cities, Prosper Everywhere" strategy, implemented for nearly two years, has "overall results that are still not ideal and remain some distance from the target." Consequently, the board has decided to appropriately reduce the final dividend payout ratio for fiscal 2025 to retain more sufficient cash reserves to address short-term uncertainties such as weak domestic consumption.

For fiscal 2025, WANT WANT CHINA proposed a final dividend of 1.38 US cents per share, compared to 2.04 US cents per share in the previous fiscal year. This represents a reduction of 0.66 US cents per share, a decrease of approximately 32.4%.