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.

Ask AI · Beverage business growth falters—how to respond to the impact of made-to-order tea drinks?

This article is from The Economic Times Weekly, by Zhang Yijing

Photo source: Taken by a reporter from The Economic Times Weekly

On March 23, Kansai Master Holding (00322.HK, hereinafter “Kansai Master”) released an announcement disclosing its 2025 annual results.

During the reporting period, the group achieved revenue of 8B yuan, down 79.07B yuan from the previous year, representing a year-on-year decline of 2.0%. This marked the first time in nearly nine years that annual revenue fell on a year-on-year basis; however, the net profit attributable to shareholders was 1.58B yuan, up 767 million yuan from the previous year, a year-on-year increase of 20.5%, reaching the highest level since the company’s listing.

However, it should be noted that in 2025, the company’s adjusted profit attributable to shareholders was 4.5B yuan, up 525 million yuan from the previous year.

Although compared with its old rival Uni-President Enterprises China (00220.HK, hereinafter “Uni-President”)—whose revenue and profits both increased year on year—Kansai Master’s performance in terms of “increased profits but not increased revenue” looks somewhat less impressive. The data show that in 2025, Uni-President achieved revenue of 4.25B yuan, up 4.6% year on year; and net profit attributable to equity holders was 31.71B yuan, up 10.9% year on year.

However, Zhu Danpeng, a food industry analyst in China, said in an interview with a reporter from The Economic Times Weekly that in 2025, many companies in the fast-moving consumer goods (FMCG) industry showed a pattern of both revenue and profit declining. As a traditional giant, even though Kansai Master’s revenue saw a slight decline, managing to achieve profit growth is truly hard-earned.

In addition, Dong Peng, a senior corporate management expert and senior consultant, pointed out that Kansai Master’s pattern of “increased profits but not increased revenue” reflects that the company has shifted from its past expansion strategy of grabbing market share to a defense strategy of reinforcing a “profit safety cushion.” This is a passive adjustment, but also a practical choice that fits the current market environment.

On the day after the annual report was released, Kansai Master’s stock price rose steadily. By the close, it was 13.22 Hong Kong dollars per share, up 9.98% from the previous trading day, with a total market value of approximately 74.5 billion Hong Kong dollars.

Instant noodles recover, but beverage business revenue declines

Over the past year, Kansai Master’s overall revenue shrank, mainly because the growth engine of its largest revenue pillar—its beverage business—lost momentum.

Kansai Master’s revenue is mainly made up of two businesses: instant noodles and beverages. In 2025, the group’s beverage business generated revenue of 2.05B yuan, down 2.9% year on year, which meant it sold 50.12B yuan less than in 2024; its instant noodle business revenue was 1.5B yuan, up slightly year on year.

Looking across a longer time horizon, the beverage business had been the core engine of Kansai Master’s revenue growth for multiple consecutive years. From 2021 to 2024, Kansai Master’s beverage business revenue growth rates were 20.18%, 7.89%, 5.39%, and 1.34%, maintaining positive growth for four consecutive years. Meanwhile, during the same period, the instant noodle business fluctuated: revenue growth rates were -3.60%, 4.17%, -2.84%, and -1.31%, making it a “drag” segment that commonly weighed on performance.

In 2025, the trajectories of the two core businesses completely reversed. The instant noodle business, which originally had weak growth, stabilized and bottomed out, with full-year revenue of 28.42B yuan, up slightly year on year. In terms of sub-categories, revenue from mid-priced bag noodles, fried snacks, and other categories increased by 0.1%, 12%, and other figures by comparison year on year; only revenue from container noodles and high-priced bag noodles declined slightly by 0.1% and 0.3% year on year, respectively.

But the beverage business—which had previously been a growth engine—faced an all-around growth bottleneck for the first time. In terms of sub-categories, during the reporting period, aside from carbonated drinks and other beverage revenue that grew year on year, revenue for three major core categories—ready-to-drink tea, bottled water, and fruit juice—all declined, with the decline in each case exceeding 5%.

Photo source: 2025 annual performance presentation materials

However, the pressure on beverage business growth is not a challenge Kansai Master faces alone.

Judging by the performance of competitors, in 2025, Uni-President’s beverage business achieved revenue of 28.42B yuan, up only 1.2% year on year; its growth rate dropped by as much as 7 percentage points compared with the previous year, facing a similar problem of weak growth.

In Zhu Danpeng’s view, the growth pressure on the two major traditional giants’ beverage businesses, to some extent, results from market share being continuously eroded by the made-to-order tea drink and fresh-ground coffee tracks.

It is reported that during last year’s food delivery battle, some consumers’ psychological price anchor for made-to-order coffee moved from 9.9 yuan down to around 6.9 yuan or even 5 yuan; and made-to-order tea drinks’ psychological price anchor fell from 15–20 yuan to the 5–10 yuan range—bringing it close to the price band of bottled drinks (dairy beverages, fruit juices) and liquid milk.

According to survey data from the third-party platform “Ma Shang Ying,” from December 2024 to November 2025, Kansai Master and Uni-President ranked second and third in the ready-to-drink tea and ready-to-drink milk tea markets, only behind Nongfu Spring. But the market share and sales volume of these two giants both declined year on year.

In terms of revenue scale, Kansai Master has long been the “number one” in the beverage industry. Yet in 2025, Nongfu Spring achieved revenue of 8B yuan, already surpassing Kansai Master’s beverage business revenue of 19.47B yuan.

It is worth mentioning that on January 1, 2026, Kansai Master held a handover of power. The founder’s third son, Wei Hongcheng, was appointed CEO, forming a “brothers jointly governing” arrangement with the current chairman of the board, Wei Hongming. It is understood that Wei Hongcheng has worked deeply within the Kansai Master system for over 10 years, with particularly strong firsthand experience in managing and operating the company’s largest revenue pillar—the beverage business.

According to publicly available biographies, in February 2015, Wei Hongcheng was appointed a director of Kansai Master’s beverage business, and has served as chairman of that segment since 2019. Under his leadership, Kansai Master’s beverage business completed its “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 Kansai Master’s beverage business can further improve and solidify its product matrix, and leverage its own brand effect, scale effect, fan effect, and complete supply chain system, its development in 2026 is still worth the market’s期待.

Regarding questions about how the company’s management plans to boost the beverage business and performance going forward, a reporter from The Economic Times Weekly sent an interview outline to Kansai Master; as of the time of publication, no response was received.

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

Under pressure on the revenue side, why Kansai Master’s net profit reached a new high may be partly due to the products “raising prices.”

According to materials, in the first quarter of 2024, Kansai Master raised prices for certain beverages including 1L bottled iced black tea, green tea, and jasmine honey tea. The retail price increased from 4 yuan to 5 yuan. In May 2024, Kansai Master adjusted the retail price of —bag instant noodles from 2.8 yuan to 3 yuan, and adjusted the suggested retail price of bucket noodles from 4.5 yuan to 5 yuan.

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

However, the profitability improvement brought by the price increases was even more significant. The financial reports show that in 2025 Kansai Master’s gross margin was 34.8%, up 1.7 percentage points from 2024 and reaching the highest level in recent years. Among them, the instant noodle business achieved gross profit of 52.55B yuan, up 3.7% year on year; its gross margin rose from 28.6% in 2024 to 29.7%, an increase of 1.1 percentage points. Regarding the reasons for the improvement in instant noodle business gross margin, Kansai Master’s explanation was “due to favorable pricing and raw material prices.”

Photo source: Wind

In the same period, the beverage business achieved gross profit of 50.12B yuan, up 3.1% year on year; gross margin rose from 35.3% in 2024 to 37.5%, an increase of 2.2 percentage points.

Driven by the year-on-year increase in gross margin, in 2025 Kansai Master’s instant noodle business achieved net profit attributable to shareholders of 8.44B yuan, up 10.1% year on year, earning an additional 207 million yuan compared with 2024. The beverage business achieved net profit attributable to shareholders of 8B yuan, up 18.5% year on year, earning an additional 355 million yuan compared with 2024.

It is worth noting that in this year when the company’s profits surged significantly, the number of distributors actually fell sharply. By the end of 2025, Kansai Master Holding had 57,609 distributors, down from 67,215 at the end of 2024—a reduction of 9,606.

The short-term tailwind from price hikes boosted Kansai Master’s profits, but it failed to stop revenue declines and channel contraction. With the newly appointed CEO taking over, how to resolve the structural contradiction of “increased profits but not increased revenue” may determine whether this traditional giant can hold its ground amid the changes.