Shares of Haitian Flavouring (03288) tumbled more than 10% during intraday trading, last down 9.12% at HK$29.68 with turnover reaching HK$158 million. The sharp decline follows the company's release of its 2026 interim results, which revealed a slowdown in second-quarter momentum.

For the first half of the year, Haitian Flavouring reported revenue of RMB 16.146 billion, up 6.01% year-on-year, while net profit attributable to shareholders rose 7.13% to RMB 4.19 billion. However, the second quarter alone showed a marked deceleration, with revenue of RMB 7.12 billion, up just 2.9% year-on-year, and net profit attributable to shareholders of RMB 1.75 billion, up only 2.0%. More notably, non-GAAP net profit excluding non-recurring items fell 3.4% year-on-year to RMB 1.61 billion.

Breaking down the second-quarter performance by segment, revenue from soy sauce, oyster sauce, seasoning paste, and other products reached RMB 3.545 billion, RMB 1.144 billion, RMB 722 million, and RMB 1.294 billion respectively, representing growth of 1.07%, 0.12%, 1.27%, and 6.31%.

Where the slowdown originates

According to analysts at Sinolink Securities, the deceleration in core product categories during Q2 stems from sluggish catering demand, though the company's expanding portfolio of healthy and diversified products is contributing incremental growth. Guosheng Securities echoed similar sentiments, noting that while Q2 growth rates moderated compared to Q1, the potential for future expansion remains promising.

What could reignite growth

In the near term, a recovery in the catering sector serves as a key catalyst for the company. Additionally, employee shareholding plans are expected to bolster growth potential, potentially unlocking further upside for the condiment giant as market conditions improve.