Market capitalization evaporated by 7 billion HKD! IF Coconut Water's parent company saw net profit decline by over 30% last year

IFBH, the coconut water company’s, annual performance report shows increased revenue but no profit growth.

On February 26, IFBH released its 2025 financial report, revealing that last year the company achieved revenue of $176 million, an 11.9% increase year-over-year; net profit attributable to shareholders was approximately $22.8 million, down 31.7% year-over-year. The day after the release, IFBH’s stock hit a record low, closing at HKD 13.3 per share, down 1.77%, with a total market value of HKD 3.528 billion. Notably, on its first day of trading, the market cap was HKD 10.53 billion, meaning since listing, the company’s market value has evaporated by HKD 7 billion.

As the leader in the coconut water niche, IFBH once attracted industry attention with the story of “46 employees generating 1 billion in revenue.” Now, just over a year after going public, why has it suddenly slowed down?

Innococo’s declining revenue drags down overall performance

Over 90% of revenue comes from China

Looking solely at revenue growth, IFBH’s 2025 performance doesn’t seem too bad. This is mainly thanks to the strong performance of its core brand “if,” which saw a 27% increase in annual revenue, further solidifying its leadership in China’s coconut water market. However, behind this impressive surface, IFBH is under significant operational pressure.

First, net profit has sharply declined. In 2025, net profit attributable to shareholders dropped 31.7% year-over-year, and gross margin fell from 36.7% in 2024 to 32.9%. The financial report indicates that the profit loss isn’t due to product stagnation but results from multiple factors. On one hand, the appreciation of the Thai baht against the US dollar caused unfavorable currency fluctuations, directly eroding profits; on the other hand, to create a second growth curve, the company invested heavily in marketing—including appointing new ambassadors for its sub-brand Innococo and launching large outdoor campaigns—leading to a 76% surge in marketing expenses to $13.02 million. Coupled with over $5 million in one-time professional fees related to the listing, this resulted in the awkward situation of “increased revenue but no profit.”

Second, the revenue structure is highly concentrated. Financial data shows that the if brand contributed $167 million, accounting for 94.5% of the group’s total revenue, with coconut water making up 97.5%. This means IFBH is essentially still a “if coconut water” company, with other product lines nearly negligible. Notably, the second brand Innococo, once highly anticipated, suffered a collapse in 2025, with revenue plummeting 63% year-over-year. IFBH CFO Ong Ying Shyun stated during the earnings call that Innococo’s decline was mainly due to internal distributor issues, including several months of shipment halts and delays in launching new sports drinks.

Finally, IFBH’s revenue remains heavily dependent on a single market. The report shows that in fiscal 2025, mainland China contributed a staggering 90.4% of IFBH’s revenue. Despite ongoing efforts to expand internationally, with rapid growth in markets like Australia and Indonesia, the low base makes it difficult for these markets to short-term offset the volatility of the Chinese market.

Intensified competition in China’s coconut water industry

if coconut water urgently seeks new growth points

Currently, China’s coconut water market has shifted from a blue ocean to a red ocean. According to data from Zhuoshi Consulting, the compound annual growth rate (CAGR) for China’s coconut water market from 2025 to 2030 is expected to reach 13% to 19%. The huge market has attracted numerous players. Besides established import brands like Vita Coco and UFC, traditional giants such as Coconut Tree and Happy Family, even retail giants like Hema and Sam’s Club, have launched their own low-priced products. The industry has quickly descended into fierce price wars, with coconut water—once dubbed the “Hermès of beverages”—now available on e-commerce platforms at as low as 9.9 yuan per liter.

This intense competition has directly loosened IFBH’s market dominance. According to offline retail monitoring firm Ma Shang Ying, the market share of if coconut water has sharply fallen from 62.07% in Q4 2023 to 30.3% in Q3 2025, nearly halving. To cope with the impact of sinking markets, IFBH has had to adjust its product mix, increasing sales of 1-liter packages with lower profit margins, which further reduces overall profitability.

Meanwhile, capital markets have expressed concern over its over-reliance on a single product, its light-asset operating model, and the risks of highly concentrated raw material and production sources. Since going public, IFBH’s stock price has continued to decline, dropping more than 60% from its peak at listing.

Faced with fierce competition in China, IFBH has announced a set of deep localization “combination punches,” but whether these measures will generate new growth remains uncertain.

On one hand, IFBH plans to explore local OEM (contract manufacturing) partnerships, seeking manufacturing partners in mainland China to localize key product lines, aiming to reduce costs and enhance pricing competitiveness. However, this strategy carries risks. Analysts believe that one of IFBH’s selling points has been “imported from Thailand,” with consumer perception closely tied to the Thai origin and the scent of Thai coconut water. Moving production locally in China could lower costs and help compete on price, but it might also blur brand positioning and introduce quality control risks due to supply chain changes.

On the other hand, IFBH announced plans to open its first offline if coffee concept store in the second half of 2026, serving as a platform for product sampling and direct consumer engagement. Some voices suggest that branching into coffee is a popular trend among consumer brands, but success stories are few. The coffee market is already crowded with strong players, and a coconut water brand opening a coffee shop could lead to unclear brand positioning. How to leverage offline single stores to gain consumer insights and convert them into sales presents a significant challenge.

Regardless, finding a sustainable second growth curve amid intensifying market competition—breaking free from dependence on a single market, product, or model—has become an unavoidable challenge for if coconut water.

Reporting by: Wang Jingjuan, Southern Metropolis·Wan Finance Society