Health and Happiness International Holdings Ltd. reported a 23.7% year-on-year increase in first-half revenue on a like-for-like basis, alongside a 21.8% adjusted EBITDA margin and a 10.6% adjusted net profit margin. The company, which operates under brands including Swisse and Biostime, also declared an interim dividend of HKD 0.82 per share, maintaining a 50% payout ratio for the full year.
The stock rose 20.23% to $17.83, approaching its 52-week high of $17.86, with a market capitalization of $1.45 billion. Gross debt fell by RMB 1 billion in the first half, while net leverage stood at 2.05 times as of June 30. The company held RMB 2 billion in cash and had over RMB 1.26 billion in undrawn credit lines, alongside a $20 million revolving facility.
Revenue growth was led by the Baby Nutrition & Care segment, which reported a 45% like-for-like increase, driven by a 58% rise in China and a 68.8% jump in Stage 1 growth. Market share in this segment reached 20.6%, with 550,000 new Stage 1 consumers added in the period. Adult Nutrition & Care grew 13.9%, while Pet Nutrition & Care, representing 12.5% of revenue, expanded by 16.5%, with Zesty Paws in North America growing at nearly 17%.
Management raised its full-year 2026 outlook, targeting mid-to-high teens revenue growth and adjusted EBITDA margin expansion. Net leverage is expected to decline to about 2.0 times by year-end, with adjusted net profit margin projected in the mid-to-high single digits. Gross margins improved by approximately 3 percentage points to 62.45%, while selling and distribution expenses fell by the same margin.
Chairman Luo Fei noted the company’s strong start to its three-year growth plan, while Group CEO Akash Bedi emphasized that growth was achieved without sacrificing profitability. CFO Jason Wang highlighted a consistent four-year deleveraging effort, reducing debt and lowering the interest expense margin to 5.65% from near 7% two years prior.
The company faces challenges, including elevated fish oil and freight costs, as well as a restructuring phase for its Solid Gold pet business. Additionally, H&H is appealing an Australian Taxation Office decision, though no further cash outflow is expected, and a prior AUD 100 million deposit has been held with the ATO since July 2025.
