Weilong Breaks Through the Limitations of Spicy Strips: Konjac Snacks Become a Pillar of Performance, but Also Face New Challenges and Competition

Weilong Delicious (09985.HK) recently released its financial report for 2025, showing that the company achieved an annual operating revenue of 7.224 billion yuan, a year-on-year increase of 15.28%, although the growth rate has declined compared to 28.63% in 2024; net profit attributable to shareholders reached 1.425 billion yuan, a year-on-year increase of 33.38%, with profit growth significantly outpacing revenue growth, primarily due to effective cost control.

As a leading enterprise in the domestic snack food industry, Weilong has transformed from a single producer of spicy strips to a diversified company covering flavored noodle products, vegetable products, and other products. However, its business structure is facing new challenges: the revenue share of vegetable products centered around konjac has increased from 53.8% to 62.4%, reaching 4.506 billion yuan, with a year-on-year growth of 33.7%, becoming the main driver of the company’s performance growth; meanwhile, revenue from traditional spicy strips has decreased by 4.3% year-on-year to 2.553 billion yuan, with its share dropping from 42.6% to 35.3%.

The rise of konjac products is closely related to industry trends. In recent years, low-fat, low-calorie, and high-fiber konjac products have been favored by consumers, and the scale of China’s konjac industry continues to expand. Data shows that the total output value of the industry reached 32 billion yuan in 2024, and it is expected to grow to 45 billion yuan by 2030, with an average annual compound growth rate of 11.8%. This market potential has attracted many companies, with Yanjinpuzi performing outstandingly in the konjac sector under the “Big Demon King” brand, achieving sales of over 1 billion yuan in 2024, and seeing revenue from leisure konjac products increase by 155% year-on-year in the first half of 2025, becoming Weilong’s main competitor.

Weilong’s business adjustments are also reflected in capacity data. In 2025, the company’s designed capacity for vegetable products increased from 96,228 tons to 129,986 tons, with the capacity utilization rate rising to 96.3%; while the designed capacity for flavored noodle products decreased from 237,722 tons to 202,065 tons, with a utilization rate of less than 70%, indicating a clear resource shift towards advantageous categories. However, revenue from other products was only 164 million yuan, accounting for 2.3%, and has not yet formed an effective supplement.

In terms of channels, Weilong still heavily relies on the offline market. In 2025, offline channel revenue reached 6.477 billion yuan, a year-on-year increase of 16.5%, accounting for 89.7% of total revenue, primarily due to the expansion of emerging channels such as snack wholesale; online channel revenue was 747 million yuan, a year-on-year increase of 6%, accounting for only 10%, with relatively slow development.

Cost and expense control are key to Weilong’s profit growth. Despite rising costs for some raw materials, the company’s annual gross profit still reached 3.466 billion yuan, a year-on-year increase of 14.9%, with a gross profit margin maintained at 48%. In terms of expenses, distribution and sales expenses were 1.171 billion yuan, a year-on-year increase of 14.1%, with the percentage declining to 16.2%; management expenses decreased by 14.5% year-on-year to 420 million yuan. As a result, the company’s net profit margin increased from 17% to 19.8%.

It is noteworthy that Weilong’s inventory scale has increased, rising from 878 million yuan at the end of the previous year to 889 million yuan, with inventory turnover days extending from 73 days to 86 days. The company explained that this was due to adjustments in raw material reserves to respond to market changes.