Revenue declined for the first time in nine years, Kangshifu loses top beverage spot, earned an extra 500 million in 2025 through price increases

Source: Times Weekly Report Author: Zhang Yijing

Image source: Times Weekly Reporter

On March 23, Master Kong Holdings (00322.HK, hereinafter “Master Kong”) released an announcement disclosing its 2025 annual results.

During the reporting period, the group achieved revenue of 79.068 billion yuan, a decrease of 1.583 billion yuan from the previous year, down 2.0% year-on-year, marking the first annual revenue decline in nearly nine years; however, net profit attributable to shareholders reached 4.501 billion yuan, an increase of 767 million yuan from the previous year, up 20.5%, setting a record high since listing.

It should be noted that, in 2025, the company’s adjusted net profit attributable to shareholders was 4.245 billion yuan, an increase of 525 million yuan from the previous year.

Compared to its main competitor Uni-President China (00220.HK, hereinafter “Uni-President”), which saw both revenue and profit grow year-on-year, Master Kong’s “profit up, revenue down” performance appears somewhat weaker. Data shows that in 2025, Uni-President achieved revenue of 31.714 billion yuan, a 4.6% increase; net profit attributable to equity holders was 2.05 billion yuan, up 10.9%.

However, food industry analyst Zhu Danpeng told Times Weekly that many companies in the fast-moving consumer goods industry experienced declines in both revenue and profit in 2025. As a traditional giant, Master Kong’s slight revenue decline is offset by its ability to still grow profits, which is quite commendable.

Additionally, senior corporate management expert and senior consultant Dong Peng pointed out that Master Kong’s “profit up, revenue down” pattern reflects a shift from past expansion strategies focused on market share to a defensive approach aimed at solidifying profit margins, which is a pragmatic adjustment aligned with current market conditions.

Following the release of the annual report, Master Kong’s stock price rose steadily, closing at HKD 13.22 per share, up 9.98% from the previous trading day, with a total market value of approximately HKD 74.5 billion.

Instant noodle recovery, but beverage revenue declines

Over the past year, Master Kong’s overall revenue contracted mainly due to a slowdown in its largest revenue pillar—the beverage business.

Master Kong’s revenue mainly consists of two core segments: instant noodles and beverages. In 2025, the beverage segment achieved revenue of 50.123 billion yuan, down 2.9% year-on-year, a decrease of 1.498 billion yuan compared to 2024; meanwhile, instant noodles revenue slightly increased to 28.421 billion yuan.

Looking at a longer timeline, the beverage segment was once the main engine of continuous revenue growth for Master Kong. From 2021 to 2024, the revenue growth rates for beverages were 20.18%, 7.89%, 5.39%, and 1.34%, maintaining positive growth for four consecutive years; in contrast, the instant noodle segment showed fluctuating performance, with growth rates of -3.60%, 4.17%, -2.84%, and -1.31%, often dragging down overall performance.

In 2025, the trend reversed for these two core segments. The previously sluggish instant noodle business stabilized and slightly grew, with full-year revenue of 28.421 billion yuan, a marginal increase. Within categories, mid-priced bag noodles and crispy noodles saw revenue increases of 0.1% and 12%, respectively, while container noodles and premium bag noodles saw slight declines of 0.1% and 0.3%.

Meanwhile, the beverage segment, which had been a growth driver, faced its first comprehensive growth bottleneck. Within subcategories, except for carbonated and other beverages which saw revenue growth, the three main categories—ready-to-drink tea, bottled water, and fruit juice—all experienced declines, with decreases exceeding 5%.

Image source: 2025 Annual Results Presentation Materials

However, the growth pressure on the beverage segment is not unique to Master Kong.

Looking at competitors, Uni-President’s beverage business in 2025 achieved revenue of 19.471 billion yuan, a mere 1.2% increase, with growth slowing by 7 percentage points compared to the previous year, also facing sluggish growth.

According to Zhu Danpeng, the growth pressure on the two traditional giants’ beverage businesses is partly due to market share being increasingly eroded by new segments like ready-made tea drinks and freshly brewed coffee.

It is reported that during last year’s delivery wars, consumer price anchors for freshly brewed coffee shifted from around 9.9 yuan down to 6.9 or even 5 yuan, and for freshly brewed tea from 15-20 yuan down to 5-10 yuan—approaching the price range of bottled drinks (dairy drinks, fruit juices) and liquid milk.

According to third-party platform “Ma Shang Ying” survey data, from December 2024 to November 2025, Master Kong and Uni-President ranked second and third respectively in the ready-to-drink tea and milk tea markets, behind Nongfu Spring; however, both market share and sales volume for these giants declined year-on-year.

In terms of revenue scale, Master Kong has long been the leader in the beverage industry, but in 2025, Nongfu Spring achieved revenue of 52.553 billion yuan, surpassing Master Kong’s beverage revenue of 50.123 billion yuan.

It is worth noting that on January 1, 2026, Master Kong underwent a leadership transition, with the founder’s third son, Wei Hongcheng, appointed as CEO, forming a “brotherly governance” structure with current Chairman Wei Hongming. Wei Hongcheng has been deeply involved in Master Kong for over 10 years, especially with extensive frontline experience managing the company’s largest revenue segment—beverages.

Public records show that in February 2015, Wei Hongcheng was appointed as director of Master Kong’s beverage division, and since 2019, has served as chairman of that segment. Under his leadership, Master Kong’s beverage division implemented a “full-category layout” strategy, launching popular products like sugar-free tea and sparkling water.

Zhu Danpeng believes that under the leadership of the new CEO Wei Hongcheng, if Master Kong’s beverage business can further optimize and solidify its product matrix, leveraging its brand influence, scale, fan base, and a complete supply chain system, its development in 2026 remains promising.

Regarding future plans to boost beverage performance, Times Weekly Report sent interview questions to Master Kong; as of press time, no response has been received.

Gross profit margin hits recent high, distributor count sharply reduced by 9,606 this year

Amid revenue pressure, Master Kong’s net profit reached a new high, possibly driven by product price increases.

Data shows that in the first quarter of 2024, Master Kong raised prices on 1L bottles of iced red tea, green tea, and jasmine honey tea from 4 yuan to 5 yuan. In May 2024, the company again increased the retail price of a pack of instant noodles from 2.8 yuan to 3 yuan, and the suggested retail price of bucket noodles from 4.5 yuan to 5 yuan.

Price hikes inevitably impacted sales volume. At the mid-year results meeting in 2025, management admitted that due to price increases, sales of 500ml iced red tea and other beverages remained stable in the first half of 2025, but 1L bottles experienced a decline.

However, the profit improvement from price increases was more significant. Financial reports show that in 2025, Master Kong’s gross profit margin reached 34.8%, an increase of 1.7 percentage points from 2024, reaching a recent high. Specifically, instant noodles achieved gross profit of 8.444 billion yuan, up 3.7%; gross margin increased from 28.6% in 2024 to 29.7%, an increase of 1.1 percentage points. The company explained that the improvement was due to favorable pricing and raw material costs.

Image source: Wind

Meanwhile, the beverage segment’s gross profit reached 18.807 billion yuan, up 3.1% year-on-year; gross margin increased from 35.3% in 2024 to 37.5%, up 2.2 percentage points.

Driven by the higher gross profit margins, in 2025, Master Kong’s net profit attributable to shareholders for instant noodles was 2.252 billion yuan, up 10.1%, earning 207 million yuan more than in 2024; beverage net profit attributable to shareholders was 2.274 billion yuan, up 18.5%, earning 355 million yuan more than last year.

Notably, despite the significant profit growth, Master Kong’s distributor count sharply declined. By the end of 2025, the company had 57,609 distributors, down 9,606 from 67,215 at the end of 2024.

While price increases provided short-term profit boosts, they did not prevent revenue decline and channel contraction. With the new CEO taking over, how to resolve the structural contradiction of “profit up, revenue down” may determine whether this traditional giant can stabilize amid the changing landscape.