Master Kong (康师傅) posts first annual revenue drop in nearly nine years as price hikes lift profits — reportedly a RMB 500m bump

Results and market ranking

Master Kong (康师傅) reported annual revenue of RMB 790.68 billion for 2025, a 2.0% year‑on‑year decline and the firm’s first annual revenue fall in nearly nine years. Yet net profit attributable to shareholders hit a record RMB 45.01 billion, up 20.5%, while adjusted profit rose to RMB 42.45 billion. The paradox is stark: revenue down, profits up. Meanwhile long‑time rival Nongfu Spring (农夫山泉) reportedly overtook Master Kong’s beverage arm, with Nongfu Spring’s 2025 revenue of RMB 525.53 billion surpassing Master Kong’s beverage revenue of RMB 501.23 billion — effectively costing Master Kong the “beverage king” crown it has long held.

Business mix and margin story

The group’s beverage arm — historically the growth engine — slid 2.9% year‑on‑year, while the instant‑noodle unit inched up slightly. Gross margin improved to 34.8%, a 1.7 percentage‑point lift, with margins rising across both noodles and drinks and corresponding increases in segment profits. Company disclosures and market commentary point to price increases implemented in 2024–25 (for example, 1L tea products from RMB 4 to 5, single‑bag noodles from RMB 2.8 to 3) as a key driver of the margin improvement; it has been reported that those price adjustments contributed roughly RMB 500 million to 2025 earnings.

Competition, channels and cost of growth

Why the split between top‑line weakness and bottom‑line strength? Analysts point to structural pressure on bottled drinks from rapidly growing fresh‑brew tea and coffee channels and intense price competition that has shifted consumer anchors lower. At the same time, Master Kong’s distributor network contracted sharply — from 67,215 to 57,609 outlets — suggesting channel pruning even as pricing lifted per‑unit profitability. The company’s management frames this as a defensive shift from share‑grab expansion to “protecting profit cushions,” a pragmatic pivot but one that leaves tough questions about sustained growth.

Governance change and the road ahead

A leadership change adds another variable. It has been reported that on January 1, 2026, founder Wei Hongming’s (魏宏名) third son, Wei Hongcheng (魏宏丞), took the CEO role, creating a “brother co‑governance” with the chairman; Wei Hongcheng has led the drinks unit for years and spearheaded product extensions such as no‑sugar teas and sparkling water. Can a refreshed product matrix and tighter supply‑chain execution restore beverage momentum without sacrificing margins? That will determine whether Master Kong can reverse the “profit up, revenue down” trend and defend its turf in a rapidly evolving Chinese consumer market.