Revenue and profit both increased, but Daodaoquan's stock price nearly hit the limit down.

Why Did Daodaoquan’s Strong Performance Receive a Cold Shoulder from the Market?

The day after the earnings announcement, Daodaoquan’s stock price plummeted.

On the evening of March 18, Daodaoquan (002852) released its annual report for 2025, presenting a double increase in revenue and profit.

During the reporting period, the company achieved operating revenue of 6.195 billion yuan, a year-on-year increase of 4.24%; net profit attributable to shareholders was 234 million yuan, a year-on-year increase of 32.02%; and net profit excluding non-recurring items was 187 million yuan, a year-on-year increase of 53.25%.

However, in the face of this report showing growth in both revenue and net profit, the capital market did not respond favorably.

The next day, Daodaoquan’s stock opened significantly lower, closing at 10.84 yuan per share, down 9.74%, nearing its daily limit down, marking the largest single-day drop in nearly 11 months; its total market value shrank by 400 million yuan to 3.729 billion yuan.

As a leader in the rapeseed oil segment, the company has not performed well in recent years.

Daodaoquan’s revenue gradually declined after peaking at 7.028 billion yuan in 2022, with figures of 7.001 billion yuan and 5.943 billion yuan in 2023 and 2024 respectively, only rebounding to 6.195 billion yuan in 2025, still far from its historical high.

Table created by: Zuo Yu

Breaking down the business structure, it can be seen that in 2025, the company’s largest segment, packaged oil, achieved revenue of 3.788 billion yuan, a year-on-year increase of 6.21%, accounting for 61.16% of total revenue and being the key driver of overall revenue growth; bulk oil revenue was 994 million yuan, a year-on-year increase of 55.42%, accounting for about 16% of total revenue.

In contrast, the company’s meal products generated only 1.343 billion yuan in revenue, a year-on-year decrease of 19.4%, accounting for about 22% of total revenue.

Among the three core categories, packaged oil not only has a high revenue contribution but is also the company’s “profit cow,” with a gross margin of 11.82%, although this is a decrease of 1.69 percentage points from the previous year; the gross margin for meal products is only 4.72%, less than half of that for packaged oil; and bulk oil, primarily sold to food processing companies or other oil enterprises, has a gross margin of -3.24%, indicating that the more it sells, the greater the loss. In 2025, the company’s overall gross margin was 8.33%, down 1.24 percentage points year-on-year.

Daodaoquan acknowledged in its annual report that last year, the global economy was complex and changeable, and the domestic edible oil industry faced challenges such as price fluctuations in raw materials, supply imbalances in certain categories, and profit pressures. The overall supply and demand in the raw material market tended to be relaxed, but there was significant differentiation among categories: soybean oil supply was relatively relaxed, with prices slightly rising compared to the beginning of the year; rapeseed oil, affected by trade frictions between China and Canada, faced import obstacles and supply contraction, pushing prices higher.

Against the backdrop of declining gross margins, Daodaoquan’s net profit growth last year relied primarily on cost control.

In 2025, the company’s selling expenses decreased by 21.35% year-on-year, mainly due to a nearly 60% decrease in market promotion costs; financial expenses saw a significant year-on-year decrease of 91.35%, with optimization of expenses providing significant support to profits.

Daodaoquan originated in Hunan, and the central China region is its core territory, but this advantageous area has continued to shrink in recent years.

During the reporting period, the central China region contributed 2.482 billion yuan in revenue, a year-on-year decrease of 7.58%, with its share of total revenue dropping from 45.18% to 40.06%. Looking back, revenue in this region also saw year-on-year declines of 3.96% and 6.26% in 2023 and 2024, respectively, marking three consecutive years of decline and losing its core market.

In contrast, the East China and Southwest markets, after experiencing consecutive revenue declines over the previous two years, finally saw a rebound in 2025, with year-on-year increases of 14.29% and 43.26%, respectively.

It is worth noting that these three regions almost contributed to nearly 90% of Daodaoquan’s revenue, and the company has limited expansion in other regions, with its nationalization process still facing significant challenges.

Reporter: Zuo Yu

Text Editor: Sun Wanqiu