Core Viewpoint - Vitasoy International is struggling to reverse its declining performance, with a 6% year-on-year drop in revenue for the first half of the 2026 fiscal year, primarily due to a 9% decline in revenue from the mainland China market [1][2]. Group 1: Financial Performance - For the first half of the 2026 fiscal year, Vitasoy reported revenue of HKD 3.227 billion, a decrease of 6% year-on-year [1]. - The company's operating profit was HKD 247 million, down 4% year-on-year, while the profit attributable to shareholders increased by 1% to HKD 172 million [1]. - The gross profit margin slightly decreased from 51.6% to 51.1% due to falling product prices in mainland China [1]. Group 2: Market Challenges - Vitasoy's revenue from the mainland China market was HKD 1.778 billion, representing a 9% decline year-on-year, which is the main reason for the overall revenue drop [1][2]. - The plant-based beverage market, where Vitasoy operates, has seen significant growth slow down, with a mere 2% year-on-year growth in 2023 [2]. - Increased competition from major players like Mengniu, Yili, and Dali Foods, who have launched their own soy milk products, is squeezing Vitasoy's market share [2]. Group 3: Strategic Responses - Vitasoy is undergoing leadership changes, with a new head for mainland operations appointed in April 2024, following several leadership transitions [3]. - The company has introduced new products such as sugar-free lemon tea and plans to increase the proportion of low-sugar or no-added-sugar products to 80% by the 2030/31 fiscal year [3]. - To address channel weaknesses, Vitasoy has partnered with over 800 Lawson convenience stores and various dining establishments to launch breakfast sets aimed at boosting sales [3]. Group 4: Leadership Transition - Vitasoy was founded by the Lo family in 1940, and after the passing of founder Lo Kwai Sang in 1995, his son Lo Yau Lee has led the company for 30 years [4]. - In November 2023, Lo Yau Lee's daughter, Lo Chi Mei, was appointed as vice-chairman of the board, signaling a potential succession plan [4][5]. - Lo Yau Lee has indicated that the transition of leadership will be gradual over the next two to three years [5].