Peak Season Turns Cold! Tianwei Food Q4 Performance Declines on Both Fronts, Full-Year "Double Growth" Target Missed

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Source: Securities Star

Top enterprise in composite seasoning, Tianwei Food (603317.SH), released its 2025 annual report on the evening of March 11. Despite a rebound in Q3 performance, the full-year revenue slightly declined by 0.79% year-over-year to 3.449 billion yuan; net profit attributable to shareholders decreased by 8.79% to 570 million yuan. Notably, the net profit excluding non-recurring gains and losses reflected the company’s core profitability, down 10.22% YoY to 500 million yuan, marking a double-digit decline for the first time in three years.

Affected by external consumption environment and channel reforms, Tianwei Food’s internal business faced significant pressure, with its three main product categories all reporting revenue declines in 2025. Meanwhile, the company attempted to boost performance through acquisitions, but during the reporting period, it recognized a long-term equity investment impairment loss of 28.4 million yuan on its associate “Moby Uchuang,” accounting for most of the total asset impairment loss for the year, directly dragging down profits.

1. Over 300 new distributors failed to reverse offline decline

Tianwei Food’s main products include hotpot seasonings, recipe-style seasonings, sausage and cured meat seasonings, chicken essence, and more. Quarterly, the third quarter of 2025 saw performance growth thanks to refined operations and cost optimization. However, after entering the traditional peak season in Q4, performance unexpectedly cooled: quarterly revenue fell 6.69% YoY to 1.038 billion yuan; net profit attributable to shareholders declined 7.65% YoY and 12.2% quarter-over-quarter, contrasting sharply with the double-digit growth expectations for the same period in 2024.

Looking at product structure, the market performance of main products diverged in Q4. Revenue from hotpot seasonings and recipe-style seasonings was 422 million yuan and 428 million yuan, respectively, down 10.4% and 14.1% YoY; in contrast, sausage and cured meat seasonings grew 18.2% YoY to 130 million yuan.

Guangda Securities commented in its research report that the decline in hotpot seasoning sales in Q4 was mainly due to the delayed Chinese New Year, combined with a high base from the previous year; the pressure on recipe-style seasonings was also due to the delayed holiday and weak consumer demand, with intensified competition. The growth in sausage and cured meat seasonings was attributed to the company’s early market deployment and successful capture of peak sales season.

Despite the significant quarterly growth in sausage and cured meat seasonings, this did not reverse the overall downward trend for the year. The category’s revenue was halved in the first half, leading to a full-year decline of 12.52% YoY to 288 million yuan, a much larger drop than hotpot seasonings (-2.87%) and recipe-style seasonings (-0.20%).

From the channel perspective, Tianwei Food relies heavily on offline channels, which contributed 2.507 billion yuan in 2025, accounting for over 70% of total revenue. However, despite a net increase of 346 distributors over the year, offline channel growth slowed by 12.76% compared to the previous year, and channel expansion did not effectively translate into revenue growth.

Chairman and CEO Deng Wen explained at the 2025 performance briefing that the increase in distributors was mainly due to expanding into lower-tier markets and underserved areas, as well as optimizing and eliminating inefficient distributors. Offline revenue pressure was mainly caused by intensified industry competition, channel inventory reduction, and slowing demand for traditional categories.

2. Revenue and net profit growth targets not achieved

Profitability pressure on Tianwei Food was influenced by rising sales expenses and asset impairment losses during the reporting period.

Securities Star noted that although Tianwei Food’s gross profit margin in 2025 benefited from lower raw material costs and supply chain optimization, increasing 0.9 percentage points to 40.7%, this did not fully pass through to profits. During the period, the company’s operating expense ratio rose by 1 percentage point to 20.2%, with sales expenses being the main drag: total sales expenses reached 490 million yuan, up 8.67%, with the expense ratio increasing 1.2 percentage points to 14.2%. The rigid growth in expenses was mainly due to higher employee compensation, travel and conference costs, and increased online marketing investments from its consolidated subsidiary “Jadian Wewei.”

Jadian Wewei, acquired by Tianwei Food at the end of 2024 for over 100 million yuan, is an online multi-purpose seasoning brand focused on innovative products for young consumers. In 2025, its revenue and net profit were 313 million yuan and 17.93 million yuan, respectively, exceeding performance commitments. However, its high investment mode also pushed up the company’s overall sales expenses.

Meanwhile, the company recognized an asset impairment loss of 31 million yuan, including a 28.4 million yuan impairment on its long-term equity investment in the associate “Moby Uchuang.” Public data shows Tianwei Food led a multi-million yuan Series A funding round for Moby Uchuang in March 2023, and currently holds about 9.95% of its shares. Moby Uchuang owns restaurant brands such as “Malubianbian Skewers” and “Old Street Spicy Hot Pot.” In 2025, Moby Uchuang faced a “profit increase without revenue growth” dilemma: net profit was 14.27 million yuan, up 0.78% YoY, but revenue plummeted 38% YoY to 124 million yuan. The shrinking revenue scale was likely a key reason for the asset impairment.

Although the impairment loss directly impacted current profits, the company’s overall external expansion strategy continued. In September 2025, it completed a controlling acquisition of “Yipinwei Xiang,” entering the high-growth segment of garlic and ginger paste sauces. However, this external growth also increased goodwill, which reached 445 million yuan by the end of 2025.

Overall, while the 2025 annual report showed some operational highlights, the company failed to meet its goal of 15% YoY growth in revenue and net profit set in the 2024 annual report, nor did it achieve the performance targets outlined in the “2024 Employee Stock Ownership Plan” for 2025.

At the performance briefing, management stated that in 2026, the company will pursue a dual-driven strategy of internal growth and external expansion, with retail as the core, customized B2B as the breakthrough, and simultaneous overseas expansion. Through product upgrades, channel refinement, and M&A synergy, they aim to continuously improve operational quality and shareholder returns. Whether this “internal + external” dual approach can truly drive a performance rebound remains to be seen by the market. (First published by Securities Star, author | Wu Fan)