Investment Rating - The investment rating for H&H International Holdings is "Buy" and is maintained [6]. Core Views - In the first three quarters of 2025, the company reported total revenue of 10.81 billion RMB, reflecting a year-on-year increase of 12.3%. All business segments recorded positive growth, with the adult nutrition and care products segment increasing by 6.0%, the infant nutrition and care products segment by 24.0%, and the pet nutrition and care products segment by 8.2% [2][4][6]. Summary by Relevant Sections Revenue Performance - Total revenue for the first three quarters of 2025 was 10.81 billion RMB, up 12.3% year-on-year. The adult nutrition and care products segment saw a 6.0% increase, while the infant nutrition and care products segment grew by 24.0%. Specifically, infant formula revenue surged by 33.3%, and the decline in infant probiotics and nutritional supplements narrowed to 2.3%. The pet nutrition and care products segment also experienced an 8.2% increase [2][4][6]. Business Segment Analysis - The adult nutrition and care (ANC) segment's revenue increased by 6.0%, with domestic revenue rising by 15.7%. Cross-border e-commerce revenue grew by 23.1%, and Douyin revenue surged by 77.7%. However, Australian revenue declined by 19.4%, primarily due to the company's proactive adjustment of purchasing channels. In contrast, Australian local revenue increased by 8.9%, maintaining market leadership for the Swisse brand. Other regions saw a 19% revenue increase, driven by high growth in nine emerging Asian markets. The infant nutrition and care (BNC) segment's revenue rose by 24.0%, with infant formula revenue increasing by 33.3% (domestic revenue up 35.2%). The market share of the company's premium infant formula brand reached 16.4% in 2025 Q3, with a quarterly increase to 17.3%. The probiotics segment's revenue decline was mitigated by new product promotions and online channel stabilization. The pet nutrition and care (PNC) segment's revenue grew by 8.2%, with North American Zesty Paws revenue up 12.4%, while Solid Gold revenue fell by 18.3% due to channel and product structure adjustments. In China, pet nutrition revenue increased by 8.0%, with high-margin products rising to 33.7% [6]. Financial Position - The company has a strong cash position, with a cash balance of 1.74 billion RMB at the end of Q3 2025, following the early repayment of 150 million RMB equivalent in USD debt. Overall, the performance across multiple business segments is positive, indicating a favorable outlook for H&H as a supplier of nutritional products for all family members. The projected net profits for 2025, 2026, and 2027 are 518 million RMB, 672 million RMB, and 781 million RMB, respectively, corresponding to price-to-earnings ratios of 16, 12, and 11 times [6].

Core Insights - H&H International Holdings (01112) reported a 12.0% year-on-year increase in total revenue for the nine months ending September 30, 2025, reaching RMB 10.805 billion [1] - All business segments experienced positive growth, with the high-margin nutritional supplements accounting for 64.5% of total revenue [1] - The adult nutrition and care products segment grew by 5.2% year-on-year, driven by strong double-digit growth in mainland China and expanding markets [1] - The infant nutrition and care products segment accelerated its growth to 24.0%, primarily due to a 33.3% year-on-year increase in infant formula milk powder sales [1] - The infant probiotics and nutritional supplements business saw a reduced decline of 2.3%, with a return to strong double-digit growth in the last three months of the reporting period [1]

Core Viewpoint - The infant formula industry is experiencing a rebound in performance despite a backdrop of reduced market demand and intensified competition, with several companies reporting growth in both revenue and profit for the first half of 2025 [1][9]. Group 1: Company Performance - Health and Nutrition Group (健合集团) reported a revenue increase of 5.2% to RMB 7.02 billion and a net profit growth of 4.6% in the first half of 2025, reversing the decline seen in 2024 [2]. - The three main business segments of Health and Nutrition Group all showed revenue growth, with Adult Nutrition and Care (ANC) at RMB 3.44 billion (up 5.9%), Infant Nutrition and Care (BNC) at RMB 2.50 billion (up 2.9%), and Pet Nutrition and Care (PNC) at RMB 1.08 billion (up 8.6%) [2]. - Aoyou Dairy (澳优乳业) achieved a revenue of approximately RMB 3.887 billion, a 5.6% increase, and a net profit of RMB 181 million, up 24.1% for the same period [6]. - Aoyou's own brand infant formula business generated approximately RMB 2.826 billion, with a 3.1% growth in goat milk formula [6]. Group 2: Market Trends - The sales of infant formula in mainland China grew by 10.0%, significantly outpacing the overall market's retail growth of 0.2% [4]. - The market share of Health and Nutrition Group in the ultra-premium infant formula segment increased from 12.9% to 15.9%, reaching a historical high [4]. - The infant formula market is expected to see a growth rate of around 5% in retail market size by 2025, driven by a rebound in birth rates and supportive policies [11]. - The implementation of a new subsidy policy for families with children under three years old is anticipated to provide structural benefits to the infant formula market [11][12]. Group 3: Consumer Behavior - There is a noticeable trend of consumption upgrading in the infant formula market, with consumers willing to pay higher prices for high-quality or specialized products [12]. - The proportion of consumers purchasing infant formula priced above RMB 300 increased to 26% in 2024, up from 21% in 2023 [12]. - The lower-tier cities and rural markets are showing significant consumption upgrades, releasing potential in the down-market segment and contributing to the expansion of the high-end and ultra-high-end infant formula market [12].

Core Viewpoint - H&H International Holdings reported a decline in net profit despite a slight increase in revenue, leading to a drop in share price [1] Financial Performance - The company achieved revenue of RMB 7.019 billion for the six months ending June 30, 2025, representing a year-on-year increase of 4.89% [1] - Net profit attributable to shareholders was RMB 71.017 million, a significant decrease of 76.78% compared to the previous year [1] - Basic earnings per share were reported at RMB 0.11 [1] Dividend Announcement - The company proposed an interim dividend of HKD 0.19 per ordinary share, down from HKD 0.30 in the same period last year [1] Business Segment Performance - Revenue growth was attributed to all business segments, including adult nutrition and care products, infant nutrition and care products, and pet nutrition and care products [1] - The high-margin nutritional supplements across all three business segments saw a year-on-year revenue increase of 4.6%, accounting for 65.6% of total revenue [1]

Core Viewpoint - H&H International Holdings reported a mixed financial performance for the six months ending June 30, 2025, with revenue growth but a significant decline in profit attributable to shareholders [1] Financial Performance - The company achieved a revenue of RMB 7.019 billion, representing a year-on-year increase of 4.89% [1] - Profit attributable to shareholders was RMB 71.017 million, a decrease of 76.78% compared to the previous year [1] - Basic earnings per share were reported at RMB 0.11 [1] Dividend Announcement - The company proposed an interim dividend of HKD 0.19 per ordinary share, down from HKD 0.30 in the same period last year [1] Business Segment Performance - Revenue growth was attributed to all business segments, including adult nutrition and care products, infant nutrition and care products, and pet nutrition and care products [1] - The high-margin nutritional supplements across all three business segments saw a year-on-year revenue increase of 4.6%, accounting for 65.6% of total revenue [1]

Core Insights - H&H International Holdings reported a mid-single-digit revenue growth for the six months ending June 30, 2025, driven by growth across all business segments, including adult nutrition and care products, infant nutrition and care products, and pet nutrition and care products [1] Group 1: Adult Nutrition and Care Products - The adult nutrition and care products segment experienced a mid-single-digit revenue increase, primarily due to double-digit growth in mainland China and strong performance in other expanding markets [1] - The growth in this segment is attributed to rising consumer demand for beauty, anti-aging, and detox products, as well as the success of innovative product lines such as Swisse Plus+, Little Swisse, Smart Melts, and Swisse Magnesium Glycinate [1] - Swisse maintains a leading position in the overall vitamin, herbal, and mineral supplement market in mainland China, benefiting from its strong e-commerce presence [1] Group 2: Infant Nutrition and Care Products - The infant nutrition and care products segment saw a return to growth with a low single-digit year-on-year increase, driven by high single-digit growth in infant formula sales [2] - The strategy to attract new consumers, particularly through e-commerce and specialty infant stores, has helped expand market share, with Biostime's ultra-premium infant formula market share increasing from 13.0% to 15.8% [2] - During the 618 online shopping festival, the sales volume of the first and second stages of infant formula recorded a 103% increase [2] - However, the infant probiotics and nutritional supplements segment experienced a double-digit year-on-year decline due to reduced foot traffic in pharmacy channels and industry-wide challenges, although online sales in mainland China still showed low single-digit growth [2] Group 3: Pet Nutrition and Care Products - The pet nutrition and care products segment recorded a high single-digit revenue growth compared to the same period last year, benefiting from the increasing trend of premiumization in pet nutrition, pet humanization, and a rising number of pets [3] - The high-margin pet supplements segment continues to achieve steady revenue growth in the low to mid-double digits [3]