Core Viewpoint - H&H International Holdings (01112) reported a 5% year-on-year increase in total revenue for H1 2025, amounting to 7.019 billion yuan, with adjusted comparable EBITDA decreasing by 3% to 1.101 billion yuan, and adjusted comparable net profit increasing by 5% to 363 million yuan. The company is expected to see EPS of 0.79, 1.05, and 1.30 yuan for 2025-2027, with a "Buy" investment rating assigned by Huaxin Securities [1]. Revenue and Profitability - The company experienced a year-on-year revenue increase, with a notable improvement in gross margin. The gross margin for H1 2025 rose by 2 percentage points to 62.53%, driven by higher margins in adult and pet nutrition and care products, along with product mix optimization [1]. - The proportion of sales and distribution/administrative expenses relative to revenue increased by 3 percentage points and decreased by 0.4 percentage points to 42.33% and 5.68%, respectively, due to changes in the channel mix for adult nutrition and care products in mainland China and investments in new market expansion strategies [1]. - Adjusted comparable EBITDA margin and adjusted comparable net profit margin decreased by 1 percentage point and 0.02 percentage points to 15.68% and 5.17%, respectively, primarily due to high base effects from the previous year and increased selling expenses [1]. Business Segment Performance - The adult nutrition and care products segment saw a 5% year-on-year revenue increase to 3.439 billion yuan, largely attributed to the outstanding performance of Swisse's innovative anti-aging product line, which grew by 39% compared to the benchmark [2]. - Revenue from infant nutrition and care products increased by 3% year-on-year to 2.501 billion yuan, driven by effective e-commerce channel development and new mother education initiatives in specialty stores. The company successfully transitioned its products to meet new national standards, with the market share of its premium infant formula brand reaching a historical high of 15.9% [2]. - The pet nutrition and care products segment experienced a 10% year-on-year revenue increase to 1.079 billion yuan, with gross margin rising by 12 percentage points to 58.70%. This growth was supported by deepened partnerships in North America and the ongoing high-end upgrade of Solid Gold in mainland China, leading to significant improvements in profitability [2]. Regional and Channel Insights - Revenue from mainland China increased by 9% year-on-year to 4.936 billion yuan, driven by strong growth in adult nutrition and care products and rapid channel expansion. Cross-border e-commerce revenue grew by 18%, with Douyin channel revenue surging by 80%, becoming a key growth engine [3]. - Revenue from Australia and New Zealand decreased by 18% to 801 million yuan, primarily due to a decline in corporate purchasing business [3]. - North American revenue increased by 6% to 862 million yuan, benefiting from the popularity of premium pet nutrition products and a growing pet population, with major retailers like Amazon, Walmart, and PerSmart performing well [3]. - Other regions saw a 17% year-on-year revenue increase to 420 million yuan, with strong growth in the Asian expansion market [3].
华鑫证券：首予H&H国际控股“买入”评级 电商成为核心引擎