Sign Up

Yan Palace Sees Profit Growth in H1-25 Despite Revenue Contraction

China's largest edible bird's nest brand said its profit rose 20% to 35% in the first half of 2025, returning to bottom line growth despite pressure on revenue

Key Takeaways:

Yan Palace said it expects to report its profit grew 20% to 35% increase in the first six months of 2025 despite flat to negative revenue growth

Lower selling costs, a new "intelligent" factory in Xiamen and new products are boosting margins for the maker of bird's nest products

In these economic turbulent times, Chinese consumers are finding more affordable variations on traditional products made from bird's nests easier to swallow.

That's a key message coming from Xiamen Yan Palace Bird's Nest Industry Co. Ltd. (1497.HK), whose profit rebounded nicely in the first half of this year after falling in 2024, according to a profit alert it issued last week. Investors rewarded the company by flocking to its stock, which flew up by over 7% over the next few days, even as the company's newer focus on more affordable products resulted in some revenue stagnation.

The company said it expects to report revenue for the first half of the year between 1 billion yuan ($139.8 million) and 1.06 billion yuan, down slightly year-on-year. But its profit fared better, as the company forecast 20% to 35% growth for that metric to between 72 million yuan and 81 million yuan compared with the year-ago period.

The improving bottom line wasn't entirely unexpected, since the company's annual results for 2024 showed its profit stabilized in the second half of the year after falling sharply in the first half, even though its revenue began to contract in the second half of the year.

Yan Palace got a boost in 2024 from its newer products, whose revenue rose 63.3% for the year, helped by strong demand for its cheaper edible bird's nest (EBN) porridge introduced in 2023, which uses bird's nests as its base. The company's other more affordable new products include its Bird's Nest Peptide Natural Soda Water, and Whole ...