Recently, Anhui Chinaherb Flavors & Fragrances Co., Ltd. (hereinafter referred to as “China Herb”) released its first full-year financial report since going public on the Beijing Stock Exchange in September last year.
According to the financial report, China Herb achieved a total revenue of 222 million yuan ($30.44 million) in 2024, representing a year-on-year increase of 7.89%. However, net profit attributable to shareholders fell to 36.63 million yuan ($5 million), a year-on-year decline of 10.75%, shifting from positive to negative growth. Net profit attributable to shareholders excluding non-recurring items dropped significantly to 23.39 million yuan ($3.2 million), down 37.72% year-on-year, also turning from positive to negative growth.
As disclosed in the report, the increase in revenue during the reporting period was mainly due to the company actively expanding its market and developing new clients. Selling expenses increased by 1.4937 million yuan ($204,900) compared to the same period last year, up 34.54% year-on-year, primarily due to the company’s efforts to explore both domestic and international markets, participate in various industry exhibitions, and boost sales efforts. Administrative expenses rose by 9.1657 million yuan ($1.25 million), a 99.73% year-on-year increase, mainly due to increased labor and other costs during the construction and trial production phases of its subsidiary Zhongcao New Materials.
On a quarterly basis, revenue showed a steady upward trend throughout 2024, with Q4 revenue reaching the highest at 65.87 million yuan ($9 million). However, net profit attributable to shareholders declined quarter by quarter, dropping sharply to 3.75 million yuan ($514,500) in Q4.
Public information shows that China Herb is a company specializing in the R&D, production, and sales of fragrances and flavors. It has established stable partnerships with many well-known domestic and international companies such as Symrise and Givaudan. Its main products include cooling agents, synthetic fragrances, and natural fragrances, which are used in the food and beverage, personal care, tobacco, and pharmaceutical industries. According to the financial report, the company’s main products accounted for 96.83% of total revenue during the reporting period, with little change in product structure.
By product category, sales of cooling agents, synthetic fragrances, and natural fragrances during the reporting period were 160 million yuan ($21.95 million), 43.24 million yuan ($5.93 million), and 11.33 million yuan ($1.55 million) respectively, accounting for 72.3%, 19.5%, and 5.1% of total revenue. Year-on-year, they increased by 2.42%, 57.20%, and 26.33% respectively. The report states that China Herb strengthened efforts to diversify its product sales by increasing the sales of synthetic and natural fragrances.
By region, domestic and international markets generated revenues of 183 million yuan ($25.1 million) and 39.17 million yuan ($5.37 million) respectively, accounting for 82.4% and 17.6% of total revenue. Sales in these regions grew by 5.81% and 18.80% year-on-year, respectively. It is reported that during the reporting period, China Herb actively expanded its sales channels and overseas market share, leading to a notable increase in international sales.
The report also disclosed the company’s ongoing project to produce 2,600 tons of cooling agents and fragrance ingredients annually. To date, a total of 296 million yuan ($40.6 million) has been invested, with 155 million yuan ($20.26 million) invested in the current period. Phase I of the project entered trial production in October 2024, and by the end of the reporting period, Phase II had completed supporting construction and equipment installation.
Finally, China Herb stated in the financial report that it will strengthen its technical R&D team, promote technical cooperation with universities and other institutions, enhance its innovation capabilities, and improve the transformation of core technologies. The company also aims to accelerate talent development and recruitment, strengthen team building, improve operational management to reduce costs and increase efficiency, advance trial production and capacity release for its new materials project, actively explore markets and participate in domestic and international trade shows, improve sales performance, optimize innovative marketing strategies, and strengthen product quality control to further enhance customer satisfaction.
