Revenue drops for the first time in nearly nine years—Master Kong loses its “No. 1 beverages” crown, and in 2025 it makes an extra 500 million yuan through price increases.

Image source: Courtesy of Time Weekly reporter

On March 23, Kon s Beverage Holdings (00322.HK, hereinafter “Master Kong”) released an announcement disclosing its 2025 annual performance.

During the reporting period, the group achieved revenue of RMB 79.07B, down by RMB 1.58B from the previous year, representing a year-over-year decline of 2.0%. This marked the first time in nearly nine years that annual revenue showed a year-over-year decrease; however, profit attributable to shareholders reached RMB 4.5B, up by RMB 767M from the previous year, representing a year-over-year increase of 20.5%, setting a historical record since listing.

That said, it needs to be pointed out that in 2025, the company’s profit attributable to shareholders, adjusted, was RMB 4.25B, up by RMB 525M from the previous year.

Although compared with its longtime rival Uni-President China (00220.HK, hereinafter “Uni-President”), whose revenue and profit both increased year over year, Master Kong’s “profit growth without revenue growth” performance appears somewhat less impressive. The data show that in 2025, Uni-President recorded revenue of RMB 31.71B, up 4.6% year over year; net profit attributable to equity holders was RMB 2.05B, up 10.9% year over year.

However, when Zhu Danpeng, a China food industry analyst, was interviewed by a Time Weekly reporter, he said that in 2025, many companies in the fast-moving consumer goods (FMCG) sector showed a trend of declining both revenue and profits. As a traditional giant, even though Master Kong’s revenue saw a slight decline, managing to achieve profit growth is truly noteworthy.

In addition, Dong Peng, a senior corporate management expert and senior consultant, pointed out that Master Kong’s “profit growth without revenue growth” pattern reflects that the company has shifted from its former expansion strategy of capturing market share to a defensive strategy of shoring up a profit safety cushion. This is a pragmatic choice—an adjustment made passively, but one aligned with the current market environment.

The day after the annual report was released, Master Kong’s share price rose steadily. By the close of trading, it was HK$13.22 per share, up 9.98% from the previous trading day, with a total market capitalization of approximately HK$74.5 billion.

Instant noodles rebound, but beverage business revenue declines

Over the past year, Master Kong’s overall revenue contracted, mainly driven by the growth slowdown in its largest revenue pillar—its beverage business.

Master Kong’s revenue mainly consists of two segments: instant noodles and beverages. In 2025, the group’s beverage business revenue was RMB 50.12B, down 2.9% year over year, which means it sold 1.5B fewer yuan than in 2024; instant noodles business revenue was RMB 28.42B, up marginally year over year.

Looking across a longer timeline, the beverage business had been the core engine behind Master Kong’s year-over-year revenue growth for consecutive years. From 2021 to 2024, Master Kong’s beverage business revenue growth rates were 20.18%, 7.89%, 5.39%, and 1.34%, respectively—maintaining positive growth for four consecutive years. Meanwhile, during the same period, the instant noodles business showed fluctuating performance, with revenue growth rates of -3.60%, 4.17%, -2.84%, and -1.31%, respectively—typically a “lagging behind” segment that dragged on performance.

In 2025, the trajectories of the two core businesses reversed completely. The instant noodles business, which originally struggled to sustain growth, stabilized and returned to growth. Full-year revenue was RMB 28.42B, up marginally year over year. In terms of subcategories, revenue for mid-priced bag noodles, ready-to-eat fried snacks (convenience snacks), and other categories increased by 0.1%, 12%, and 0.1% year over year, respectively. By contrast, revenue for cup noodles and high-priced bag noodles declined slightly by 0.1% and 0.3% year over year.

However, the beverage business—once the growth engine—encountered a comprehensive growth bottleneck for the first time. By subcategory, during the reporting period, besides soda and other beverage revenue that increased year over year, revenue for three major core categories—ready-to-drink tea, bottled water, and juice—declined, and the decline in each case exceeded 5%.

Image source: 2025 annual performance presentation materials

However, the growth pressure on the beverage business is not a challenge faced by Master Kong alone.

Judging from the performance of competitors, in 2025 Uni-President’s beverage business revenue was RMB 19.47B, up only 1.2% year over year. Its growth rate dropped sharply by 7 percentage points from the previous year, and it faced the same difficulty of weak growth momentum.

In Zhu Danpeng’s view, the growth pressure on the beverage businesses of the two major traditional giants is, to a certain extent, the result of market share being steadily eroded by the fresh-tea and fresh-ground coffee tracks.

It is reported that during last year’s delivery battle, some consumers’ psychological price anchor for fresh-ground coffee shifted from RMB 9.9 to around RMB 6.9 and even about RMB 5. Meanwhile, the psychological price anchor for fresh-tea beverages fell from the RMB 15–20 range to the RMB 5–10 range—bringing it close to the price bands of bottled drinks (dairy drinks, fruit juice) and liquid milk.

According to survey data from the third-party platform “MaShangYing,” from December 2024 to November 2025, Master Kong and Uni-President ranked second and third in the ready-to-drink tea and ready-to-drink milk tea markets, respectively, behind Nongfu Spring. However, the market share and sales volume of these two giants both declined year over year.

In terms of revenue scale, Master Kong has long been the “No. 1” in the beverage industry. In 2025, Nongfu Spring achieved revenue of RMB 52.55B, already surpassing Master Kong’s beverage business revenue of RMB 50.12B.

It also needs to be mentioned that on January 1, 2026, Master Kong carried out a handover of power. The founder’s third son, Wei Hongcheng, became CEO, forming a “brother co-governance” arrangement with the current chairman of the board, Wei Hongming. It is understood that Wei Hongcheng has been deeply involved in Master Kong’s system for over 10 years, especially with extensive first-line operational experience in the company’s largest revenue pillar—the beverage business.

Based on publicly available resumes, in February 2015, Wei Hongcheng was appointed as a director of Master Kong’s beverage segment. Since 2019, he has served as chairman of this segment. Under his leadership, Master Kong’s beverage business completed a “full-category layout” strategy and launched a number of hit products, such as sugar-free tea and sparkling water.

Zhu Danpeng believes that under the leadership of the newly appointed CEO, Wei Hongcheng, if Master Kong’s beverage business can further improve and strengthen its product matrix, and leverage its brand effect, scale effect, fan effect, and a complete supply chain system, its development in 2026 will still be worth the market’s expectations.

Regarding questions about how the management plans to further boost the beverage business and performance going forward, Time Weekly sent an interview outline to Master Kong. As of the time of publication, no response was received.

Gross margin hits a new high in recent years; the number of distributors sharply drops by 9,606 within the year

Under revenue-side pressure, one reason Master Kong’s net profit was able to reach a new high might be, at least in part, product “price increases.”

According to materials, in the first quarter of 2024, Master Kong raised prices for beverages such as 1L bottled iced black tea, green tea, and jasmine honey tea. The retail price increased from RMB 4 to RMB 5. In May 2024, Master Kong again adjusted the retail price of a single pack of instant noodles from RMB 2.8 to RMB 3. The suggested retail price of bucket noodles was adjusted from RMB 4.5 to RMB 5.

Raising prices inevitably impacts sales volume. At a mid-year performance meeting in 2025, management acknowledged that due to the price increases, the volume of beverages such as 500ml iced black tea in the first half of 2025 remained flat, but the 1L format showed a decline.

However, the profitability improvement resulting from the price increases was even more significant. The financial report shows that in 2025, Master Kong’s gross margin was 34.8%, up 1.7 percentage points from 2024, reaching a new high in recent years. Among them, the instant noodles business achieved gross profit of RMB 8.44B, up 3.7% year over year; gross margin rose from 28.6% in 2024 to 29.7%, an increase of 1.1 percentage points. Regarding the reason for the improvement in instant noodles gross margin, Master Kong explained that it was “due to favorable selling prices and raw material prices.”

Image source: Wind

In the same period, the beverage business achieved gross profit of RMB 18.81B, up 3.1% year over year. Gross margin rose from 35.3% in 2024 to 37.5%, an increase of 2.2 percentage points.

Driven by the year-over-year increase in gross margin, in 2025 Master Kong’s instant noodles business achieved net profit attributable to shareholders of RMB 2.25B, up 10.1% year over year, which means it earned RMB 207 million more than in 2024; the beverage business achieved net profit attributable to shareholders of RMB 2.27B, up 18.5% year over year, which means it earned RMB 355 million more than in 2024.

It is worth noting that in the year when the company’s profit grew significantly, the number of its distributors actually saw a sharp decline. By the end of 2025, Master Kong Holdings had 57,609 distributors, down from 67,215 at the end of 2024—a reduction of 9,606.

The short-term dividend from price hikes boosted Master Kong’s profits, but it failed to stop revenue decline and channel contraction. With the new CEO taking over, how to resolve the structural contradiction of “profit growth without revenue growth” may determine whether this traditional giant can hold its ground amid the changing landscape.

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