Fuling Zhacai will see increased revenue but no profit growth by 2025, with sales expenses rising over 18% year-on-year, and plans to focus on the Chinese-style seasoning sector.

Copied from: Red Star News

On March 28, 2025, Red Star Capital Bureau reported that on the evening of March 27, Fuling Zhacai (002507.SZ) released its 2025 annual report, showing a “higher revenue but not higher profits” pattern in its earnings.

During the reporting period, the company achieved operating revenue of 2.432 billion yuan, up 1.88% year over year; net profit attributable to shareholders was 768 million yuan, down 3.92% year over year; and net cash flow from operating activities was 657 million yuan, down 19.55% year over year.

In its annual report, Fuling Zhacai said that in 2025, the seasonings industry to which its main “accompaniment-and-seasoning dishes” business belongs maintained steady growth in overall scale, but the growth rate slowed somewhat. The industry has formally entered a deep adjustment stage characterized by stock competition and structural upgrading.

Against this backdrop, Fuling Zhacai is currently adjusting its sales business model in multiple ways. Last year, selling expenses rose 18.33% year over year. In 2025, the company newly established a Key Customer Center to explore emerging channels. As of the end of last year, Fuling Zhacai’s accounts receivable from distributors was 29.169 million yuan, up 256.11%.

Photo by Visual China

Established a Key Customer Center last year

Selling expenses up 18.33% year over year

Fuling Zhacai’s 2025 revenue returned to positive growth. From 2022 to 2024, the company’s revenue was 2.548 billion yuan, 2.450 billion yuan, and 2.387 billion yuan, respectively. In 2025, revenue was 2.432 billion yuan, up 1.88% year over year compared with 2024.

However, Fuling Zhacai’s net profit attributable to shareholders is still declining. From 2022 to 2025, net profit attributable to shareholders was 899 million yuan, 827 million yuan, 780 million yuan, and 768 million yuan, respectively.

With profits falling year after year, Fuling Zhacai is currently adjusting its sales business model in multiple ways. Last year, selling expenses rose 18.33% year over year. The company newly established a Key Customer Center in 2025 to explore key-account customization direct-operations models for emerging channels such as Sam’s and Little Elephant, as well as special channels. At the same time, it also tried emerging channels such as community group buying, “rest-and-eat” channels, and livestreaming platforms.

It is worth noting that last year, Fuling Zhacai had cooperated with Tmall Supermarket to develop customized products. Fuling Zhacai’s official website shows that in October last year, after the Ujiang Double-Pair combo pack was launched at Sam’s one month earlier, it topped the new product popularity leaderboard and the pickled-vegetable category popularity leaderboard, with terminal sales exceeding 10 million yuan.

Previously, the company had set up a Family Business Division, a New Channels Business Division, a Catering Business Division, and an International Business Division. Among them, the New Channels Business Division launched single products such as Old Chongqing Mixed Sauce and Minced Pork with Cowpea, while the International Business Division expanded into Southeast Asian countries and regions including Cambodia, Indonesia, and Malaysia. Full-year export business revenue grew by more than 17%.

According to information disclosed in the announcement, Fuling Zhacai currently sells mainly through a distributor model, supplemented by sales via e-commerce platforms.

Red Star Capital Bureau noted that Fuling Zhacai is still continuously reducing the number of distributors. Based on financial reports published over the years, there were 3,239 distributors at the end of 2023, which was reduced to 2,632 at the end of 2024—a net decrease of 607. At the end of 2025, the number further fell to 2,442, down another 190 from 2024. Fuling Zhacai said the reason for the changes was that during the reporting period the company carried out ongoing optimization and cleanup of distributors whose market layout was unreasonable and whose channels conflicted, in order to rectify market order.

Currently, Fuling Zhacai’s settlement method with distributors is “pay first, ship later” plus partial credit. As of the end of last year, accounts receivable was 29.169 million yuan, up 256.11%. Fuling Zhacai said the changes were mainly due to, during the reporting period, the company complying with changes in consumer scenarios, expanding sales channels, and adding 3 direct-sale customers. The payment for this portion of direct-sale goods was affected by the credit period, and it had not been collected as of the end of the period.

Failed cross-border acquisition of Wei Zimei last year

Will focus on the Chinese-style seasoning field

When responding to investors’ questions last year, Fuling Zhacai said the company’s products are in a highly competitive industry where low-price competition has long existed in the market. Since the smart transformation, the company has adhered to a “premium strategy,” using product quality and brand momentum to attract consumers.

Facing performance decline, Fuling Zhacai had considered entering the compound seasoning sector. In April last year, Fuling Zhacai disclosed that it planned to acquire 51% of the equity of Sichuan Wei Zimei Food Technology Co., Ltd. (abbreviated as “Wei Zimei”) through issuing shares to specific parties and paying cash. However, after discussions between both sides on core terms such as the consideration for the acquisition agreement, the two parties failed to reach a consensus, and the M&A project could not proceed. In October last year, Fuling Zhacai announced the termination of the acquisition.

In February this year, Zhongjiu High-Tech (600872.SH) and Sichuan Wei Zimei Food Co., Ltd. held a strategic investment signing ceremony, announcing that they plan to acquire 55% of Wei Zimei’s equity.

However, Fuling Zhacai still places high hopes on sauce products (Chinese-style seasoning sauces, douban sauce, compound seasonings, and hot pot base). In its annual report, it refers to them as “the core pillar categories for the company’s future development.” It said that focusing on the Chinese-style seasoning field is a key move to drive the company’s transformation from accompaniment-and-seasoning dishes to an all-around seasoning strategy, and to improve its full-category matrix. It aligns with industry development trends and the needs brought by consumption upgrading.

Reporter Yu Yao and Zhou Yi, Red Star News

Editor Xiao Shiqing

Reviewed by He Xianju