Summary: Minsheng Health, a Chinese vitamin/mineral supplement leader, hosted a 2024
earnings briefing to address investor concerns over slowing growth,
profitability gaps, and reliance on its core V&M products. The company
reported revenue growth but declining margins and R&D spending. Initiatives
include R&D boosts, a probiotic ecosystem expansion, equity incentives, and
diversification into functional beverages, aesthetic medicine, and wellness
verticals to navigate market shifts.
On
May 13-14, Minsheng Health, a leading player in China’s vitamin and mineral
supplement sector, convened its 2024 annual virtual earnings presentation to
engage with investors through an interactive Q&A session. Key executives,
including Chairman Zhu Fujiang and Director/General Manager Zhang
Haijun, addressed inquiries related to corporate operations, strategic growth
trajectories, and share price performance—issues of paramount concern to
stakeholders.
Financial Performance Review:
Decelerating Growth Amidst Structural Shifts
According
to 2024 fiscal data, Minsheng Health delivered a dual-growth revenue and net
profit report, albeit with a notable slowdown in momentum. The company achieved
RMB 641 million in annual revenue, marking a 10.23% YoY increase, while net
profit attributable to shareholders reached RMB 91.83 million, up 7.24%.
However, this single-digit profit growth lags significantly behind prior-year
benchmarks, including a 38.46% surge in 2021, a 12.51% uptick in 2022, and an
8.38% increase in 2023.
The
first quarter of 2025 continued this trend of uneven profitability expansion.
Despite a 15.70% revenue increase to RMB 271 million, net profit growth
plateaued at 6.51% (RMB 62.71 million), highlighting a widening gap between
top-line and bottom-line growth rates.
Core Product Dynamics:
Dominance of Vitamin & Mineral Portfolio, but Diversification Lags
As
a stalwart in China’s vitamin and mineral (V&M) segment for four decades,
Minsheng Health’s flagship "21 Jinweita" brand remains its
cornerstone. The V&M supplement series, accounting for the lion’s share of
revenue, breached the RMB 600 million threshold for the first time in 2024,
reaching RMB 621 million (+10.47% YoY). Yet, this concentration underscores a
reliance on a singular product category, exposing potential vulnerabilities to
market volatility. Conversely, the company’s probiotic segment contracted
sharply, with revenue plummeting 33.74% YoY to RMB 4.23 million in 2024.
Profitability Pressures: Gross
Margin Erosion and R&D Investment Decline
Gross
margins contracted by 10.15% YoY to 55.77% in 2024 (from 62.07% in 2023),
driven primarily by a 6.37% decline in the V&M supplement series’ margin.
This downward trend persisted into Q1 2025, with margins slipping to 56.06%
(-10.74% YoY).
A
critical observation lies in the company’s expenditure allocation. In 2024,
advertising expenses surpassed R&D investments, with R&D spending
contracting 18.87% YoY to RMB 23.98 million. As a percentage of revenue,
R&D intensity dipped from 5.08% in 2023 to 3.74% in 2024, further narrowing
to 3.17% in Q1 2025 (RMB 8.59 million, -16.06% YoY). In contrast, sales
expenses edged up 0.32% YoY to RMB 191 million, with advertising media spend
rising 8.7% to RMB 37.41 million.
Strategic Countermeasures:
R&D Reinforcement and Ecosystem Expansion
Company
leadership emphasized its commitment to R&D innovation, stating that
strategic investments would prioritize market-driven product development. By
leveraging agile market research and customer engagement, Minsheng Health aims
to enhance new product adoption rates. Future initiatives include bolstering
R&D budgets, optimizing innovation frameworks, and fostering
cross-functional collaboration.
Corporate Profile and Strategic
Pillars
A
subsidiary of Hangzhou Minsheng Health Pharmaceutical Co., Ltd., the company
operates as a high-tech enterprise integrating R&D, production, and
distribution of OTC pharmaceuticals, dietary supplements, and functional foods.
Its "Four New Strategies"—new products, projects, businesses, and
models—underpin a diversified portfolio comprising four core brands: 21
Jinweita, Purebio, Minsheng Tongchun, and Minsheng Health. Listed on the
Shenzhen Stock Exchange’s ChiNext board in September 2023, the firm has since
navigated post-IPO valuation challenges, with its market capitalization and
share price declining by two-thirds relative to its debut close.
Shareholder Value Initiatives:
Equity Incentives and Buyback Programs
In
response to share price pressures, Minsheng Health unveiled a multi-pronged
strategy. This includes a strategic partnership with Zhongke Jiayi in 2024 to
expand its probiotic ecosystem, spanning probiotic powder, OEM manufacturing,
and finished formulations. Concurrently, the company launched a 2024 restricted
stock incentive plan, reinforced by a March 2025 share repurchase authorization
using internal funds for equity-based compensation. Additionally, annual cash
dividends have consistently exceeded 30% of net profits since listing.
Future Growth Trajectories:
Functional Beverages, Aesthetic Medicine, and Lifestyle Wellness
The
company recently filed trademarks for "Daily Multivitamin" and
"21 Jinweita Daily Multivitamin" under Category 32 (beverages),
signaling potential entry into the functional beverage market—though plans
remain preliminary. Furthermore, Minsheng Health established an aesthetic
medicine division, introducing the professional skincare brand
"Jisuran" to develop safe, efficacy-driven products. While nascent,
this segment faces inherent uncertainties. The firm is also exploring sleep
health and sports nutrition verticals, with active R&D pipelines under
development.
Industry Perspective:
Navigating Transition in a Maturing Market
Minsheng
Health’s strategic recalibration reflects broader industry trends in China’s
wellness sector, where competitive intensification and evolving consumer
preferences necessitate agile innovation and diversification. While its V&M
dominance provides a stable foundation, the company’s ability to balance
short-term profitability pressures with long-term R&D-driven growth will
define its trajectory in an increasingly crowded marketplace.
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