Net profit surges by 20.5%! Master Kong proves with strength: Established fast-moving consumer brands can still compete

Ask AI · How will new CEO Wei Hongcheng promote the company’s digital transformation?

Produced by | Zhongfang.com

Reviewed by | Li Xiaoyan

On March 23, Master Kong Holdings (00322.HK) released its full-year financial report for 2025. In an environment of rationalized consumer markets and fierce industry competition, this “profit growth without revenue growth” performance is not a sign of slowing growth, but rather the phased result of this thirty-plus-year FMCG giant’s proactive strategic adjustment and focus on high-quality development—net profit attributable to parent company of 4.5 billion yuan, a year-on-year increase of 20.5%, gross profit margin rising to 34.8%, with two core businesses’ profitability rising simultaneously, cash flow and dividend-paying capacity continuously strengthening, demonstrating the deep resilience and transformational determination of this established leader through cycles.

In 2025, Master Kong achieved revenue of 79.07B yuan, a slight decrease of 2.0% year-on-year, marking a short-term correction after eight consecutive years of growth, fundamentally a strategic choice to proactively optimize structure and abandon inefficient scale. In stark contrast, profitability achieved a leap forward: net profit attributable to parent of 4.5B yuan, up 20.5% year-on-year, setting a new record; gross profit margin increased by 1.7 percentage points to 34.8%, ROE reached 30.8%, up 4.2 percentage points from the previous year, with both profitability quality and asset efficiency improving in tandem. This impressive performance stems from dual drivers of cost dividends and operational efficiency improvements. In 2025, prices of core raw materials such as palm oil and PET resin fell back, combined with product structure optimization and refined management, enabling Master Kong to successfully turn cost advantages into profit growth. More importantly, the company replaced “scale expansion” with “quality and efficiency enhancement,” and despite a slight decline in revenue, gross profit still increased by 3.1% to 27.53B yuan, with steady cash flow from operating activities providing ample “ammunition” for subsequent innovation investments and channel reforms. The capital market responded positively, with stock prices stabilizing and rising, and valuation logic shifting from “high growth” to “high dividend + cash flow defense,” highlighting its value as an industry ballast.

Master Kong’s two core businesses show a benign pattern of “steady progress and profit increase,” with instant noodles solidifying the basic market, and beverages optimizing efficiency, jointly supporting high-quality group growth. As the group’s “ballast,” the instant noodle business achieved revenue of 28.42B yuan in 2025, a slight increase year-on-year, which is not easy in a saturated market with takeout impacts. Even more impressive, gross profit margin increased by 1.1 percentage points to 29.7%, driving net profit up 10.1% to 2.25B yuan. Relying on flagship products like braised beef noodles, the brand’s recognition, nationwide distribution network, and high-end layout (such as Express instant noodles and premium bowl noodles) continue to consolidate its position as an industry leader with “one super and many strong” competitors, becoming the group’s most stable profit source. The beverage business, accounting for 63.4% of the group’s revenue, achieved revenue of 50.12B yuan in 2025, down 2.9% year-on-year, facing a phased challenge amid industry health trends, new brand emergence, and channel reforms. However, profitability remained strong: gross profit margin increased by 2.2 percentage points to 37.5%, net profit grew 18.5% to 2.27B yuan, becoming the core engine of profit growth. This “volume decline but profit rise” results from Master Kong’s proactive price increases, product structure optimization, and focus on high-margin products. The price adjustments at the end of 2023, though temporarily impacting sales, significantly improved per-bottle profitability. Meanwhile, the company accelerated layout in sugar-free teas (such as “Heir of Tea”) and functional beverages, rebooted classic promotions like “One More Bottle,” and upgraded digitally to precisely stimulate terminal sales. Carbonated drinks (Pepsi) grew against the trend, injecting vitality into the business, demonstrating Master Kong’s rapid adaptation to consumption trends and building momentum for beverage recovery.

In the face of industry transformation, Master Kong did not cling to traditional advantages but instead drove channel optimization and organizational innovation to break the stagnation of stock competition. Over the past two years, the number of distributors decreased from 76k to 57k, not due to channel shrinkage but as part of Master Kong’s proactive “elimination of the inferior and retention of the excellent,” phasing out inefficient distributors and focusing on quality partners to improve overall channel efficiency and profitability. Meanwhile, the company accelerated deployment in new channels such as instant retail and community group buying, reconstructing the supply chain with digital tools, enhancing terminal response speed and scene marketing capabilities, revitalizing its traditional channel network.

By the end of 2025, founder Wei Yanzhou’s third son, Wei Hongcheng, took over as CEO, ending a decade of professional management and marking a return of Master Kong to family control, with more flexible decision-making and focused strategy. The new management proposed “Back to Day 1” and “Wolf-like Struggle,” advocating for returning to entrepreneurial agility, efficiency, and bold experimentation, fostering a culture of honesty and innovation. Wei Hongcheng has extensive experience in the beverage business, deeply familiar with traditional channels and new consumption logic. After taking office, he promoted product innovation, digitalization of channels, and marketing upgrades, injecting youthfulness and data-driven genes into this veteran giant. From rebooting classic promotions to layout of health products, from channel streamlining to efficiency enhancement, Master Kong is breaking inertia with a “wolf-like” spirit, seeking incremental growth in a stock-dominated market.

The slight revenue decline in 2025 is an inevitable pain point in Master Kong’s shift from “scale priority” to “quality priority,” and a strategic choice to actively embrace change. In the current environment of health-conscious consumption, fragmented channels, and fierce competition, Master Kong is not blindly pursuing scale but anchoring on profit, leveraging innovation, and improving efficiency to solidify long-term development. In the short term, the beverage business is accelerating its health transformation, with sugar-free teas and functional drinks gradually gaining volume, classic product promotions activating terminals, combined with continued cost dividends, and resilient profitability expected to persist. In the long term, under new leadership, organizational reform, channel digitalization, and product premiumization will reshape Master Kong’s core competitiveness, helping this national brand rediscover growth momentum in a stock-based era.

From “scale expansion” to “value cultivation,” Master Kong proves with its 2025 financial report that the vitality of an established FMCG giant does not lie in always maintaining rapid growth, but in resilience through cycles, proactive transformation, and long-term focus. In 2026, with the implementation of strategies and the effects of innovation, Master Kong is expected to reverse its decline, achieving stronger profitability and healthier growth, continuing to write a new chapter for this national brand.