Vitasoy’s profits increase without revenue growth; the old beverage brand’s distribution channels are still experiencing a painful adjustment period.

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Vitasoy International's profits are still being restored, but revenues are once again under pressure.

On June 25, Vitasoy International disclosed its annual results for the fiscal year ended March 31, 2026. During the reporting period, the company achieved revenue of HK$6.061 billion, a year-on-year decrease of 3%; the gross profit margin slightly dropped from last year’s 51.3% to 51.0%.

In the same period, the company’s operating profit increased by 18% year-on-year to HK$430 million, and profit attributable to equity holders of the company increased by 17% to HK$274 million.

The decline in revenue and growth in profits mainly stem from one-off asset disposal gains and cost control.

During the fiscal year, the company recognized about HK$151 million from the sale of Vitasoy's Shanghai land and buildings. The Shanghai plant has suspended production since 2024, and the related land and buildings have been included in the urban village transformation project in Songjiang District, Shanghai.

This transaction has both revitalized idle assets and supported Vitasoy’s production integration.

The company mentioned in its financial report that the group will further integrate production into its Dongguan plant to improve asset utilization and plant efficiency.

The pressure in the core market of Mainland China still exists.

For the fiscal year ended March 31, 2026, Vitasoy’s Mainland China business generated external customer revenue of HK$3.189 billion, down about 5% year-on-year. Excluding gains from the Shanghai land sale, Mainland China’s operating profit was about HK$284 million, lower than last year’s HK$311 million, with the operating profit margin maintained at around 9%.

Vitasoy attributed the decline in Mainland China’s revenue to the weak performance in traditional retail channels, while emerging channels represented by bulk snack retailers have yet to fully make up the gap.

During the fiscal year, Vitasoy appointed a new sales management team for Mainland China and brought in Chief Sales Director Tang Hengfeng, who has backgrounds in major companies such as Pepsi and Danone, attempting to realign the internal organizational structure with the needs of emerging channels and strengthen channel execution and terminal sales capability.

Vitasoy stated that the Mainland China market will continue to expand its share in plant-based milk and soy milk, stabilize its market share in sugar tea products, and accelerate emerging omnichannel growth through product differentiation and customization.

The Hong Kong business is also under pressure. The financial report shows Hong Kong business revenue at HK$2.19 billion, a year-on-year decrease of about 3%; operating profit was HK$263 million, a year-on-year decrease of about 6%. The company stated that its Hong Kong business maintains leadership in plant-based milk and tea categories, but due to the trend of consumers going north, slower demand in Macau and Vitasoy’s own retail stores, both revenue and profitability have declined.

In overseas markets, Australia and New Zealand business revenue was HK$565 million, up about 4% year-on-year, but it still recorded an operating loss of HK$138 million, which included HK$98 million in non-cash impairment charges. After excluding the impairment, the loss narrowed to about HK$40.3 million.

Vitasoy explained that the production issues in Australia have been resolved and production has stabilized, but increases in raw material and logistics costs, more promotional activities, and changes in consumer behavior and channel mix have extended the recovery period.

By contrast, Singapore is one of the few markets with clear improvement. Driven by the expansion of the tofu business, Singapore's revenue rose by about 9% year-on-year to HK$116 million, returning to profitability with operating profit of approximately HK$730,000.

Facing an unstable performance recovery, Vitasoy chose to use shareholder returns to stabilize market expectations.

During the fiscal year, the company repurchased 53.2 million shares at a total cost of HK$418 million; the board recommends a final dividend ofHK$0.135 per share, together with an interim dividend of HK$0.04 per share, making the annual dividend HK$0.175 per share, higher than the previous year’s HK$0.142 per share.

However, for a consumer goods company, selling land, buybacks, and dividends can only temporarily improve market perception.

What Vitasoy truly needs to restore is growth in main business income and channel adaptation capability. Whether it can quickly adapt to the pace of development in emerging channels will determine the real effect of this round of improvement.

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