WL DELICIOUS (9985) last year's net profit increased by 33.6% year-on-year to 1.427 billion yuan

China's leading spicy snack food company WL DELICIOUS (9985.HK) announced its full-year results for last year, with overall business operations and financial performance maintaining a good growth trend, achieving revenue of approximately RMB 7.224 billion (RMB, the same below), a year-on-year increase of 15.3%. This was mainly attributed to the group's active innovation and continuous deepening in product innovation and structural upgrades, omnichannel construction, and brand marketing throughout the year. In addition, despite the impact of rising costs of some raw materials during the year, the gross profit margin slightly decreased by 0.1 percentage points to 48.0% compared to the previous year. However, the group effectively offset the impact of rising costs by actively improving supply chain efficiency, achieving a year-on-year gross profit increase of 14.9% to approximately RMB 3.466 billion. The group's net profit for the year increased by 33.6% year-on-year to approximately RMB 1.427 billion, with the net profit margin rising from 17.0% in the previous year to 19.8%, mainly due to the increase in revenue and improved efficiency. Currently, consumers are more focused on instant gratification, convenience, and self-care, with a continuous increase in preference for national brands, emphasizing taste, novelty, and health needs when selecting food. During this year, WL DELICIOUS deeply understood consumer needs, continuously focused on a "multi-category" product strategy, advanced omnichannel construction, and aimed to rejuvenate the brand, striving to transform traditional Chinese cuisine into snacks that consumers can enjoy anytime and anywhere, meeting the diverse and personalized needs of the market and consumers. In terms of product innovation, the group continuously explored consumer needs throughout the year, insisting on optimizing the multi-category product matrix, with existing products continuously upgraded and significant results in new product innovation, leading to an increase in the revenue share of vegetable products from 53.8% in the previous year to 62.4%. Moreover, the group adheres to the product development philosophy of "maximizing the original value of food through industrial thinking," continuously introducing new products. Among them, several new products were launched around vegetable products during the year, including sesame sauce flavor, high-fiber porcini flavor, and Dai-style smashed chicken feet flavor, with the high-fiber porcini flavor maintaining its low-calorie advantage and being rich in dietary fiber, further covering more consumer groups; the Dai-style smashed chicken feet flavor restores the unique taste of Yunnan, providing consumers with more diverse choices. In terms of noodle products, the group launched spicy beef flavor "Kiss Burn," gathering four regional aromatic spices, further expanding the boundaries of flavor innovation. In terms of brand building, WL DELICIOUS continues to deepen emotional connections with young consumers, with the classic product "Kiss Burn" collaborating with the national comic "Mo Dao Zu Shi," extending consumer behavior into emotional interaction and collection experiences. At the same time, it partnered with central media to carry out a konjac sourcing journey and strengthened brand trust and penetration through traditional media's high-frequency reach to consumers. In online communication, the group focuses on content platforms such as Douyin, Kuaishou, and Xiaohongshu, using "hot meme marketing + live interaction + influencer recommendations" as leverage to create viral content, effectively driving user engagement and consumption conversion, continuously releasing the brand's youthful vitality. In terms of channels, the group closely follows the evolving trends of retail channels, with an omnichannel strategy at its core, strengthening continuous coverage and penetration both online and offline. Offline, it continues to empower distributors to enhance store service systems, strengthen the execution capabilities of sales teams at the terminal, and actively seize opportunities in emerging channels such as snack wholesale stores; Online, we continue to build a comprehensive operational system covering all platforms, deepen operations in mainstream e-commerce channels, and simultaneously expand emerging content e-commerce channels. Throughout the year, revenue generated from online channels has shown steady growth, reflecting the group's proactive adjustment of operational strategies based on the development trends of online channels, embracing the growth opportunities brought by emerging online channels. In 2025, the group will continue to upgrade its corporate culture, maintaining the mission of "Let the world love Chinese flavors" while further enriching its vision to "Make traditional cuisine entertaining, leisure-oriented, convenient, accessible, and digitally intelligent, leading in NPS and efficiency, creating a vibrant ecological platform for 123 years." This aims to further optimize product experience, enhance brand image, and improve operational efficiency. At the same time, the core values will be upgraded to "Consumer experience-centered, based on strivers, courageously seeking benchmarks, and adhering to self-criticism," breaking cognitive limitations through benchmarking excellence and maintaining self-criticism, forming a continuously evolving organizational capability that drives the group to remain sharp and vibrant in competition. In addition, the group is committed to the automation upgrade and digital transformation of production facilities. Currently, the group has 5 operational factories in Henan Province and is continuously upgrading the automated production line for konjac; the new factory in Nanning, Guangxi has begun construction this year, providing important capacity support for business expansion. At the same time, the group continues to improve the food safety and quality assurance system across the entire chain, establishing a comprehensive quality management center to create a closed-loop management system, and deepening digital applications in marketing, supply chain, and other areas to comprehensively enhance operational efficiency, injecting strong momentum for the sustainable and steady development of the business. Mr. Liu Weiping, Chairman of WL DELICIOUS, stated that 2025 is a key year for WL DELICIOUS in terms of active innovation and efficiency improvement. In the face of rapid changes in the consumer market, the group insists on being consumer experience-centered, upgrading corporate culture, and injecting lasting momentum for long-term sustainable development. Looking ahead, the group will deepen its multi-category development strategy, continuously enrich its product matrix, strengthen content co-creation and emotional connections with young consumers; continue to promote efficient collaboration across all online and offline channels, building a dynamic and efficient network; focus on the automation and digital upgrade of key nodes in the supply chain, comprehensively enhancing response speed and operational efficiency. At the same time, the group will not forget its mission, actively fulfill its social responsibilities, and strive to create greater value for consumers, customers, shareholders, investors, employees, and society