Our reporter Xie Lan, intern journalist Liang Aonan
On the evening of March 26th, H&H International Holdings Limited (hereinafter referred to as "H&H Group") released its 2023 performance report. Last year, the company achieved a revenue of 13.93 billion yuan, a year-on-year increase of 9%. The Chinese market remains the largest contributor to the company's revenue.
During the reporting period, Jianhe Group's three major businesses continued to solidify their leading position in the core market. Swisse consolidates its position as the top ranked VHMS market online in China and in Australia. Hopewell strengthens its market position in probiotic nutritional supplements and high-end infant formula for infants and children in mainland China. Zesty Paws and Solid Gold are among the top categories in both online and offline channels in the Chinese and American markets.
Nutritional supplement business increased by 30% year-on-year
According to the 2023 annual report released by Jianhe Group, nutritional supplements have become the main engine of the company's growth during the reporting period, accounting for 60.4% of the company's total revenue, a year-on-year increase of 30%.
It is worth mentioning that Jianhe Group's nutritional supplements have continuously improved their profitability through market opportunities, helping the company's profit growth. Swisse's Chinese market achieved a strong double-digit year-on-year growth of 37.4%, and Swisse continues to hold the first place in the online vitamin, herbal, and mineral supplement (VHMS) market in mainland China.
In line with the trend of consumer classification, in 2023, Swisse Swissy will further target new demands and scenarios for nutrition and health consumption, construct a "Swisse 1+3" brand strategy matrix, continuously meet the refined nutrition and health needs of different consumers, and help Swisse Swissy establish a leading position in innovative categories.
In the infant and toddler nutrition and care products (BNC) business of Jianhe Group, the probiotics and nutritional supplements business has steadily increased, and the product portfolio has been upgraded to consolidate its market position. In 2023, the business achieved a revenue of 5.91 billion yuan, with an annual growth of 9.1% in the business of probiotics and nutritional supplements for infants and young children.
"The demand for infant and toddler nutritional supplements from consumers has significantly increased. In response to the segmented market of infant and toddler nutritional supplements, Biosphere has launched innovative products, accelerated the improvement of the infant and toddler comprehensive nutrition matrix layout, and promoted the continuous growth of market share in probiotics and nutritional supplements for infants and toddlers. At the same time, Biosphere continues to consolidate its leading position as a probiotic nutritional supplement brand for infants and toddlers in mainland China," said Jianhe Group in its financial report.
Despite the systemic challenges faced by the Chinese infant formula industry as a whole, Jianhe Group has narrowed its decline to 11.7% by continuously strengthening its investment in nutritional supplements to mitigate the impact of the decline in infant formula. As of December 31, 2023, Hesheng Yuan has further strengthened its layout in the high-end milk powder category. The Hesheng Yuan 7 infant formula series has successfully passed the "New National Standard" certification of the State Administration for Market Regulation, and has successfully completed the full channel transition.
According to Nielsen, an independent research data provider, the retail sales of high-end infant formula milk powder from Hesheng Yuan account for 12.4% of the market share, with an increase in market share and ranking fourth.
Pet nutrition and care products business achieved double-digit growth
Currently, the global number of pets is increasing, and the trend of high-end pet nutrition supplements and humanization of pets is on the rise. Moreover, the Chinese pet market is in a period of rapid development in pet ownership and pet nutrition consumption upgrading.
According to the financial report of Jianhe Group, the company's pet nutrition and care products business (PNC) achieved a total revenue of 1.87 billion yuan last year, a year-on-year increase of 18.2%. In China, PNC sales increased by 20.8% year-on-year.
"PNC business strengthens communication with consumers through online and offline markets, and Solid Gold ranks second in the category of high-end cat dry food in China's online market." Jianhe Group stated that in the North American market, PNC business revenue achieved a strong year-on-year growth of 17.2%.
According to the reporter of Securities Daily, Zenty Paws, a subsidiary of Jianhe Group, has entered Wal Mart, Target, Pet Smart, CVS, Tractor Supply and other well-known retailers and independent pet stores. By increasing its retail penetration and expanding consumer groups, it has continued to rank first in Amazon, and successfully ranked first in the sales of pet supplements under Wal Mart in a short time.
With a comprehensive omnichannel strategy, Zesty Paws has maintained significant growth in offline retail sales, ranking fourth in the channel with a market share of 10.0%. In 2023, Solid Gold will launch innovative products in the US market and enter the Wal Mart channel with the help of the synergy effect of merging PNC business, making steady progress in North America, and completing the transition of Amazon online mall mode for the first time.
In 2023, Jianhe Group delivered a good performance report. For 2024, CICC is optimistic about Jianhe Group in its research report.
"Looking ahead to 2024, despite being affected by a high base, thanks to the continuous promotion of the company's Swisse '1+3' brand strategy and channel expansion, it is expected that ANC revenue will continue to maintain double-digit growth and drive overall revenue growth to be stable. In terms of profit margin, taking into account the company's cost investment and BNC profit margin repair to continuously enhance Swisse brand strength, Jianhe Group's EBITDAmargin is expected to steadily increase year-on-year. In addition, the company will continue to gradually reduce financial leverage according to plan through operational improvements, and there is room for improvement in the company's financial expenses year-on-year." Analysts from CICC stated in their research report.