Tianwei Food, Saying Goodbye to Rapid Growth

Tianwei Food Bids Farewell to the Myth of Rapid Growth: What Lies Ahead? After the 2025 Annual Report Disclosure, the company’s stock price plummeted at market open, causing concern among small and medium investors.

As competition in the condiment market intensifies, leading companies entering the complex seasoning track are like fish in a barrel. Tianwei Food’s recipe-style seasonings face pressure on revenue, with a slight decline last year, signaling a potential danger.

Although this is an inevitable part of the internal competition, the company’s complex seasoning products still maintain strong momentum. In the future, product matrix and channel optimization may help stabilize the situation gradually.

However, overall, the company urgently needs to reverse its decelerating growth. Deepening its moat to fend off competitors is not something that can be achieved overnight.

Decelerating Growth

On the evening of March 11, Tianwei Food’s 2025 operating performance was announced, showing declines in both revenue and net profit attributable to shareholders.

In fact, in the first half of last year, the company posted its worst half-year results since listing, already preparing small and medium investors psychologically. The full year also failed to recover, further fueling market concerns.

For 2025, Tianwei Food (603317.SH) achieved approximately 3.449 billion yuan in revenue and about 570 million yuan in net profit attributable to shareholders, down 0.79% and 8.79% year-on-year, respectively. During the same period, non-recurring net profit was about 508 million yuan, down 10.22% year-on-year. Its gross profit margin was 40.67%, a slight increase of 0.89 percentage points from the previous year.

The company remains high-profile in dividends, planning to distribute a cash dividend of 0.55 yuan per share (tax included) to all shareholders, totaling about 582 million yuan (tax included).

However, the secondary market did not buy this. On March 12, the stock opened sharply lower, falling 4.56% for the day, with a total market value of 12.936 billion yuan.

According to the company’s explanation, the decline in operating conditions is mainly due to insufficient demand in the complex seasoning industry, weak market performance of products, and intensified market competition.

In the seasoning market, there has always been a distinction between strong and weak demand. Oil, salt, soy sauce, and vinegar are in the former category, while Tianwei Food’s focus on complex seasonings is a discretionary product, easily affected by consumer fatigue.

However, these two product types do not develop in parallel. After the industry entered a stock game era, leading seasoning companies have increased their focus on complex seasonings to cultivate a second growth curve, even viewing this business as a new engine for performance. As a result, market competition in complex seasonings has intensified.

Structural Changes

In April 2019, Tianwei Food successfully listed on the A-share market, initially known as the “First Stock of Hotpot Base” due to its hotpot base products.

Today, the company’s product structure has been upgraded, forming three core categories: hotpot seasonings, recipe-style seasonings, and sausage and cured meat seasonings. Among them, recipe-style seasonings (i.e., complex seasonings) account for over 50% of revenue, making it the largest core category.

In 2025, revenue from recipe-style seasonings was about 1.767 billion yuan, a slight decrease of 0.2% year-on-year, accounting for 51.23% of total revenue; hotpot seasonings and sausage/cured meat seasonings earned approximately 1.229 billion yuan and 288 million yuan, respectively, down 2.87% and 12.52% year-on-year.

The “Other” category is the only segment that saw growth. Last year, revenue from this category was about 159 million yuan, a significant increase of 50.88%. This was mainly due to the acquisition of Shandong Yipuweixiang in the second half of the year, completing business integration and addressing gaps in its complex seasoning sauce business, along with new business expansion, leading to substantial revenue growth.

Meanwhile, the company’s sales channels showed a mixed picture.

Online channels experienced explosive growth, highlighted in the annual report. Last year, brands acquired through mergers, such as Sichuan Shicui and Jiadian Wewei, performed well online, with online channel revenue reaching about 936 million yuan, a 56.91% increase.

As the mainstay offline channels, the company added 346 new distributors last year, ending with a total of 3,363 distributors. However, offline channel revenue was about 2.507 billion yuan, down 12.76% year-on-year.

This indicates that the new distributors have not compensated for the sales gap in existing channels, with insufficient effective sales growth, and overall offline channels face significant sales pressure.

In fact, Tianwei’s relationship with its distributor group is not entirely smooth. As early as November 2024, the company caused controversy by requiring distributors to choose between Qianhe, Jixiangju, and its own brand Haorenjia, sparking public debate.

Hong Kong Stock Market Path

In November 2025, Tianwei Food submitted its IPO prospectus to the Hong Kong Stock Exchange, planning to build an A+H capital platform. On one hand, it aims to raise funds in Hong Kong to enhance brand building, deepen channels, pursue M&A, and upgrade supply chains; on the other hand, it seeks to explore internationalization strategies and overseas expansion based on this capital platform.

However, based on the disclosed core use of funds, the company still primarily focuses on the domestic market, with overseas expansion in the early planning stage.

Previously, many seasoning companies expanded overseas, but due to differences in dietary culture and consumption habits, their products often do not fit well with local markets. Most companies’ first overseas markets are Southeast Asia, where Chinese culinary culture is similar.

Last May, Haitan Flavor successfully established an A+H capital platform, led by CEO Cheng Xue, to compete in overseas markets, with plans to build capacity in Indonesia and Europe, aiming for overseas revenue to account for 15% within three years. As of now, its overseas business remains in the strategic investment phase, with no clear capacity deployment announced.

Currently, the domestic market remains the largest for seasoning companies. Public data shows that in 2024, the domestic seasoning market was worth 498.1 billion yuan, expected to reach 678.8 billion yuan by 2029, with a compound annual growth rate of 6.4%.

As main products like soy sauce and vinegar face stock competition, leading industry players are increasing their focus on complex seasonings, rapidly expanding this segment. It is projected to grow from 126.5 billion yuan in 2024 to 202.9 billion yuan in 2029, with a CAGR of about 10.1%, significantly higher than the overall seasoning industry.

The rapid expansion of the complex seasoning track is rooted in consumer demographic shifts, combined with the rise of home-based economy and single-person households. A single packet can prepare a dish, standardizing cooking and reducing difficulty, shifting products from scene-driven to necessity-driven demand.

Will Tianwei Food return to a growth trajectory through listing in Hong Kong? Only time will tell.