In 2024, China’s GDP grew at an annual rate of 5%. Despite this, the trend of consumers’ preference to save money rather than on individual consumption continued into the first half of the year. With the implementation of stimulus measures to boost individual consumption, signs of a shift towards increased individual consumption began in the second half of the year. In Hong Kong, GDP grew by 2.5% year-on-year, but individual consumption remained weak. Notably, the increasing number of people spending weekends in the Greater Bay Area driven by northbound consumption contributed to the sluggish retail sales in Hong Kong. Against this backdrop, the Group has contributed to people’s health and society by providing the pleasure of eating and tasty food to people, in line with our founder, Mr Momofuku Ando’s corporate philosophy that “foodrelated job is a sacred profession (食為聖職)”.

In terms of the Group’s revenue in 2024, sales of frozen foods, Japanese-made imported gift confectioneries and beverages, and others were sluggish due to decreased consumer purchasing power in both Mainland China and Hong Kong. Despite these challenges, due to our focus on increasing sales volume of instant noodles across all regions, revenue was almost flat year-on-year at HK$ 3,811.9 million, even in the face of the depreciation of the Chinese yuan. Notably, in the fourth quarter of fiscal 2024, sales grew by 8.4% year-on-year due to the increased sales volume of instant noodles.

In terms of profits, although depreciation costs increased due to the operation of new production facilities in Hong Kong, which began operation in November 2023, the increase in sales volume helped to reduce fixed costs per unit. Consequently, gross profit increased by 0.7% year-on-year to HK$1,312.1 million, and the gross profit margin also improved from 34.0% to 34.4%. Operating profit decreased by 4.2% year-on-year to HK$417.4 million due to rising sales promotion and distribution costs, which led to a decrease in the operating profit margin from 11.4% to 10.9%. On the other hand, due to our focus on instant noodles, the profitability of the Group’s complementary businesses such as non-fried noodles, long-life noodles, frozen foods, and others deteriorated more than initially expected. In light of the expected continued severity of the business environment, the Group recorded impairment losses of HK$135.9 million, mainly in the complementary business, pursuant to Hong Kong Accounting Standard 36. As a result, net profit attributable to shareholders of the Company decreased by 39.1% year-on-year, from HK$330.2 million to HK$201.0 million, with a profit margin of 5.3%. Nevertheless, adjusted EBITDA, which excludes one-off non-cash expenses, has shown steady growth since the Company’s listing, and it increased by 0.8% year-on-year to HK$612.5 million. This indicates a resilient performance in the core business operations, even amid difficulties in certain segments.

Regarding shareholder returns, although net profit attributable to shareholders has decreased, the ability to generate cash flow from core business activities has remained stable as reflected in adjusted EBITDA. Additionally, the Group’s balance sheet is healthy, supporting returns to our shareholders. In fiscal 2024, the final dividend will be set at 9.63 HK cents per share, while the special dividend will be 6.19 HK cents per share, totalling 15.82 HK cents per share, which is consistent with the previous year. The payout ratio will be approximately 50.0% for the final dividend (the payout ratio in the prior year was also 50.0%) and 32.1% for the special dividend (there was no special dividend in the previous year), totalling 82.1%. Cash and cash equivalents have remained stable compared to the previous year.

To expand our business further, we acquired companies and established joint ventures. In June 2024, we acquired Gaemi Food Co. Ltd. (“Gaemi Food”), a snack food manufacturer in Korea. Gaemi Food owns the largest domestic market share for crispy rolls and has Halal certification.

In September 2024, we also acquired ABC Pastry Holdings Pty Ltd (“ABC Pastry”), a frozen dumpling and juicy bun (soup dumpling) manufacturer in Australia. As the number of Asian immigrants increases in Australia, demand for Chinese gourmet such as dumplings and juicy bun is expanding. After the acquisition, we continue to serve the existing customers and are actively expanding sales throughout Australia.

In November 2024, we entered into a subscription and joint venture agreement with Nissin Foods Asia Co., Ltd., being the Southeast Asian regional leader of Nissin Foods Holdings Co., Ltd.. The new joint venture aims to promote sales of Nissin brand instant noodles in Australia and New Zealand.

In fiscal 2024, we focused on sales promotion in Mainland China. In particular, we conducted a trial-tasting promotion campaign for Cup Noodles (合味道) in major cities. This campaign featured over 30,000 trial tastings, effectively highlighting the product’s deliciousness to potential customers. In addition, we collaborated with the Japanese anime “BLUE LOCK” in Mainland China and Hong Kong to launch a limited edition of Cup Noodles, targeting young anime fans.

In Hong Kong, we also developed the WeChat Mini program “Nissin Foodium” for Cha Chaan Teng’s (called local Hong Kong-style café) shop owners. This initiative included digital marketing that allowed users to earn points, which could be redeemed for special prizes. Through this programme, we aim to promote customer loyalty. Through these activities, we also aim to enhance our brand recognition and awareness, enabling consumers to experience the unique appeal of Nissin products.

Based on the corporate philosophy of “contributing to society through food” of our founder Momofuku Ando, we are committed to sustainable management as a responsible corporate citizen, providing delicious food and promoting health maintenance, and contributing to sustainable development. In terms of sustainability management, we recognise food safety and security are the foundation of our business. To support this commitment, we conduct educational activities for our employees, ensuring they are well-informed about food safety and security. In addition, our quality control team issues an internal newsletter to keep staff updated with the latest knowledge.

To demonstrate our commitment to food safety, we implemented thorough testing of fresh-cut vegetable salad products, which we began producing in 2021, by conducting nucleic acid testing (PCR method). We have a safety research institute in Shanghai, in which the Group owns a 5% stake. This institute has obtained the China Inspection Body and Laboratory Mandatory Approval (“CMA”) certification, which is issued by a Chinese inspection organisation. With this certification, we are actively implementing safety measures to ensure the quality and safety of our products. The institute also participates in formulating and revising analytical methods for the national food safety standards (GB) as led by the Chinese government, making a wide range of contributions.

Although the business environment in which our Company operates is being affected by internal factors such as a sluggish real estate market and shift in regional population, along with external factors such as geopolitical tensions, China remains one of the world’s largest markets. We believe steady economic growth will eventually return to both Mainland China and Hong Kong.

To increase sales of Cup Noodles (合味道) in Mainland China, we must strengthen our partnerships with distributors. We will also increase sales of high-end bag-type noodles. The current consumption trends indicate a strong thrifty mindset among consumers, yet there remains a significant potential demand. With the rising number of Chinese tourists and popularity of Japanese ramen shops, I believe that products such as “Demae Iccho (出前一丁)”, “Nissin Raoh”, and “Nissin Chicken Ramen”, will see increased sales as they offer consumers the opportunity to enjoy the authentic flavours at home.

The distribution business, the non-noodles business, has started to launch new products and brands. Once again, we aim to expand our business further through the expansion of sales channels.

In Hong Kong operation, we are focusing on expanding sales of various high-end bag-type noodles, including Hokkaido Iccho (北海道一丁), which is made from 100% Hokkaido-produced flour, Nissin Raoh, Nissin Chicken Ramen, and Vietnamese pho rice noodles. We are also placing strong emphasis on exports. In the frozen foods business, we are working to expand sales of premium frozen dim sum, pasta, udon, ramen, and other products. We are committed to reviving and growing the business.

In Vietnam, we will continue to strengthen sales in the domestic market and expand sales channels. The sales company in Taiwan will focus on expanding transactions with distributors and major key account retailers to improve sales volume. In Korea, Gaemi Food will strengthen sales of its mainstay product, Crispy Roll, both in the domestic market and overseas, while seeking to create synergy with Nissin. In Australia, we aim to expand the sales of frozen dumplings, tapping into consumer demand and increasing our market share.

The year 2025 is the year of the snake. Snakes shed their skin many times throughout their lives to grow and adjust to changes. I believe the key to success is transformation and adaptability in the changing business environment. I am determined to maximise business outcomes while efficiently developing the Group’s business operation and organisation. Our goal is to create long-term value for all stakeholders, including shareholders and investors of the Company. The Group is also committed to contributing to local communities, fostering sustainable growth and making a positive impact.

I believe in enriching the lives of consumers through tasty, secure, and affordable food, and I share with you the corporate philosophy of our founder, Mr Momofuku Ando, that “Create food to serve society (食創為世)”.