Both revenue and profit declined.
Under the dual pressures of demographic shifts and intensifying competition in an already saturated market, China Feihe, the leading domestic infant formula brand, is currently undergoing a challenging period of performance adjustment.
March 26,$CHINA FEIHE (06186.HK)$In its 2025 financial report, the company reported full-year revenue of 18.113 billion yuan, a year-on-year decrease of 12.7%; its net profit for the year was 2.09 billion yuan, down 42.7% year on year.
According to data from the National Bureau of Statistics, China's birth rate has declined sharply from 8.52 per thousand in 2020 to 5.63 per thousand in 2025.
Feihe cited data from Frost & Sullivan, indicating that, as a result, the size of the core target customer base (children aged 0 to 3) has shrunk from 41.9 million to about 26.5 million.
The shrinking customer base has intensified industry involution. Against the backdrop of a double-digit decline in revenue, Feihe's sales and distribution expenses still reached 7.162 billion yuan, almost unchanged from 7.165 billion yuan in 2024.
This may imply that, in order to maintain its market share amid fierce competition, Feihe must sustain high-intensity channel investments and promotional efforts, thereby leading to a passive increase in its sales expense ratio.
However, Feihe forecasts in its financial report that, as fertility-support policies are implemented across various regions, the number of newborns is expected to rebound between 2026 and 2028. For an industry currently mired in a downturn, this may signal a tentative bottoming-out and subsequent recovery.
Faced with the structural ceiling on its core business, Feihe is seeking to disrupt its existing business model.
One year ago, Chairman Leng Youbin announced a comprehensive upgrade of the company's vision, aiming to become "the most trusted Q&M Dental leader in the field of nutrition." In terms of product portfolio, the focus has shifted from products primarily targeting infants aged 0–3 to a full-scale layout of functional nutrition products covering the entire life cycle.
This transformation has already shown initial results in the data. In 2025, revenue from "other dairy products," including adult milk powder and liquid milk, reached RMB 2.06 billion, with the proportion increasing from 7.1% to 11.4%, a rise of 4.3 percentage points.
However, the transition to a full lifecycle approach is a marathon.
The logic of the adult nutrition market differs markedly from that of the maternal and infant market: the former relies more on cultivating long-term health consciousness than on rigid, stage-specific consumption.
Against the backdrop of pressure on its core business, whether Feihe can swiftly establish a moat for its second growth curve while keeping marketing costs under control remains to be further validated by market dynamics.
To maintain market confidence, from July to December 2025, Feihe cumulatively repurchased approximately 0.26 billion shares at a total consideration of about HK$1.1 billion.
The Board of Directors believes that the current trading price does not reflect the Company's intrinsic value and growth prospects.
Feihe reiterated the stability of its dividend policy, proposing a final dividend of HK$0.1290 per share and committing to maintain a dividend payout ratio of no less than 30% of net profit in each subsequent year.
Editor/Doris