HUABAO INTL (00336) saw its shares rise nearly 7% during the late trading session. As of the time of writing, the stock was up 6.73%, trading at HK$4.44, with a turnover of HK$32.3863 million.

The price movement follows a recent announcement from HUABAO INTL, which projected that its subsidiary, HUABAO Shares, would report an annual net profit attributable to shareholders of between 65 million and 95 million yuan, marking a turnaround from a loss in the previous year. The loss incurred by HUABAO Shares in 2024 was primarily due to goodwill impairment losses related to the asset group for edible flavors—specifically tobacco flavors. For the 2025 fiscal year, there is no significant further risk of goodwill impairment for HUABAO Shares.

An analysis report highlighted that HUABAO INTL, as a leading player in the flavor and fragrance industry, is gradually reducing its reliance on a single major customer and is poised to enter a new phase of growth. The company's capsule business is experiencing strong short-term growth, while its thin sheet business holds significant long-term potential. Both segments are expected to sustain growth alongside the global expansion of the heated tobacco product (HNB) market.

Furthermore, the commencement of operations at its food ingredients plant in Indonesia is enabling the company to cover the Southeast Asian market. Domestically, its subsidiary Yifang has returned to profitability and is anticipated to maintain a relatively high growth rate going forward. Potential future growth drivers include the possible deregulation of HNB products in China and the development of its own brand, NUSO.