Company Coverage
Natural Food (1837 HK): A Well-recognised Chinese Dietary Nutrition Brand
NOT RATED
Current price:
Target price:
Upside:
HK$1.71
N.A.
N.A.
Analyst
Analyst
Highlights
- We visited Natural Food’s headquarter in Shenzhen. The company is a well-recognised Chinese dietary nutrition brand. It has been undergoing omni-channel restructuring post-COVID-19 and saw improved sales conversion for its offline counters, rapid sales growth of its offline shelves and improving operating margin for its online channels.
- It saw robust growth momentum in 1H26, with a notable sales growth of 47.3-48.5% yoy during CNY 2026, and is on track to achieve its target of a 15% revenue growth and 20% net profit growth in 2026.
- It plans to raise dividend payout (43%/51% in 2024-25) in the future, backed by its solid balance sheet (~70% net cash to equity ratio with no debt) and strong cash flow generation.
Analysis
- Well-recognised Chinese dietary nutrition brand. Supported by its inhouse consumer insight and R&D teams, Natural Food develops functional improvement products that cater to specific customer needs. It aims to become the leader of Chinese dietary nutrition in Mainland China. Its key products can be categorised into: a) Chinese-style conditioning and functional improvement (~32% of 2025 revenue), such as hair growth and dampness removal, which has a one-year repurchase rate of 30%; b) Chinese-style nourishing breakfast (~40% of 2025 revenue), and c) gift box (~12% of 2025 revenue). Its growth momentum remained robust in 1H26, with a notable sales growth of 47.3-48.5% yoy during Chinese New Year (CNY) 2026, thanks to meaningful growth of its gift boxes that cater to differentiated customer demand across different channels. The company targets a 15% revenue growth and 20% net profit growth in 2026.
- Securing high-quality ingredients from seed cultivation to processing. Natural Food ensures the quality and standardisation of raw materials through end-to-end control of its supply chain, including: a) contract farming for strategic ingredients such as black sesame in Jiangxi; b) collaboration with government institutions in 2022 to cultivate patented seeds with higher nutrition content; and c) innovation in its manufacturing process such as material processing.
Highlights
- We visited Natural Food’s headquarter in Shenzhen. The company is a well-recognised Chinese dietary nutrition brand. It has been undergoing omni-channel restructuring post-COVID-19 and saw improved sales conversion for its offline counters, rapid sales growth of its offline shelves and improving operating margin for its online channels.
- It saw robust growth momentum in 1H26, with a notable sales growth of 47.3-48.5% yoy during CNY 2026, and is on track to achieve its target of a 15% revenue growth and 20% net profit growth in 2026.
- It plans to raise dividend payout (43%/51% in 2024-25) in the future, backed by its solid balance sheet (~70% net cash to equity ratio with no debt) and strong cash flow generation.
Analysis
- Well-recognised Chinese dietary nutrition brand. Supported by its inhouse consumer insight and R&D teams, Natural Food develops functional improvement products that cater to specific customer needs. It aims to become the leader of Chinese dietary nutrition in Mainland China. Its key products can be categorised into: a) Chinese-style conditioning and functional improvement (~32% of 2025 revenue), such as hair growth and dampness removal, which has a one-year repurchase rate of 30%; b) Chinese-style nourishing breakfast (~40% of 2025 revenue), and c) gift box (~12% of 2025 revenue). Its growth momentum remained robust in 1H26, with a notable sales growth of 47.3-48.5% yoy during Chinese New Year (CNY) 2026, thanks to meaningful growth of its gift boxes that cater to differentiated customer demand across different channels. The company targets a 15% revenue growth and 20% net profit growth in 2026.
- Securing high-quality ingredients from seed cultivation to processing. Natural Food ensures the quality and standardisation of raw materials through end-to-end control of its supply chain, including: a) contract farming for strategic ingredients such as black sesame in Jiangxi; b) collaboration with government institutions in 2022 to cultivate patented seeds with higher nutrition content; and c) innovation in its manufacturing process such as material processing.
NOT RATED
Current price:
Target price:
Upside:
HK$1.71
N.A.
N.A.
Analyst
Analyst
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