Good morning, everyone. Welcome to H&H Group 2026 interim results conference call.

2026 is the first year of the implementation of our three-year growth plan. Thanks to our team's effort and our business partner, we are very happy to see that we we have achieved a great start in the first half of 2026.

All three business pillars of ANC, BNC, and PNC record the growth, driving the group's revenue to increase by 23.7% year-on-year. More importantly, we believe that such growth is a structurally healthy development.

At the same time, we maintain healthy profitability and high cash conversion rate so that we have enough cash to develop our business and reduce our net leverage ratio based our plan. We are confidence in the long-term development of our business, the board has announced the distribution of the interim dividends of HK$0.82 per share to continue to reward the long-term support of our shareholder.

This dividend payout ratio returns to historical dividend payout range of 50% of adjusted net profit. I will now pass it to our CEO Akash and CFO Jason to give you a more detailed introduction.

Thank you.

Thank you, Fei, and good morning, everyone. Welcome to our first half 2026 results.

Before I walk you through our results, I just want to remind you about our brands. This is a very important page for us.

This strategy started back in 2015 when we first made our overseas acquisition of Swisse and started creating the family nutrition company towards it. Today, with pet nutrition, today we can say we are the complete family health and wellness provider.

Our brands remains the same. Our strategy remains the same, which is also underpinned on this strategy.

One of the key things that we always profess that strategy is not for short-term; strategy is for long-term. Our strategy is delivering the results.

How? We are focused, we are choiceful, we are winning in our core markets.

As Jason and I will walk through in our results, we are driving incremental growth and revenue across our core markets through our global leading brands Swisse, Biostime, Zesty Paws in China, Australia, and North America. Globalization remains central theme.

Globalization doesn't mean that we want to put the flag of H&H across markets. We are present in the key markets where our brands make sense, where we see the underlying consumption remain strong.

We are present in more than 20 markets, and we are consolidating our footprint through, again, our global strategic brands of Swisse, Zesty Paws, and Biostime across Asia, Europe, which remains central to our growth in the coming years. We don't only want to diversify, we don't want to only globalize, but we also want to invest for the future.

The future investment doesn't need to come from M&A. It needs to come in the form of innovation, in the form of product, in the form of channel, and in the form of communication.

We will continue to expand our addressable markets in our core three brands. We will diversify through this partnerships with our suppliers, with investment through our own resources into R&D and science.

Before that, remains that we want to be profitable, we want to drive growth, and we want to have a very strong balance sheet towards it. Again, this, if you look at on page number 6 of the presentation, we are very pleased to see 23.7% like-for-like revenue growth rate.

This is pretty much a strong growth rate given the external market context that we are today living in. All our three business units, as Fei has mentioned, has reported positive growth rate, and we will deep dive into this.

This growth did not come at the expense of profitability. In fact, we increased our profitability reaching an adjusted EBITDA margin of 21.8%, which is a growth rate of 71.9.

We were able to grow, we were able to drive our profitability, and this is also driving our adjusted net profit margin to double-digit, close to 10.6% percentage point. Couple this, as Fei mentioned, we have strengthened our P&L, our cash flows, and our balance sheet, and we are pleased to report a dividend of $0.82 per share.

We want to incentivize our shareholders because of the strong growth that we see. Going deeper into our business segments: ANC, led by our human supplements business.

Today, nutritional supplements represents close to 60% of our business, and ANC is the key highlight of that. We are growing in first half at 13.9%.

What drove this growth? It drove across all our existing markets and the growth markets.

Our China ANC business grew by almost 20 percentage point, but also retained superior profitability as well. This growth rate was driven by both our cross-border business and normal trade, which grew by high-teens level, showing the resilience of our brand.

Our ANZ ANC business increased by 12 percentage point when the category grew by low single-digit point. Then, our highlight, expansion markets.

They are accretive to our growth. They are not contributing high dollar sales, but they are accretive to our overall growth, growing at 20.5 percentage point.

BNC, we are so pleased to see after 2 years such an accelerated growth. It required investment, it required commitment, and thanks to our suppliers, our partners, our banking partners to believe in our growth strategy.

We reported growth rate of 45% on a like-for-like growth, but the key point to highlight, our China business, which grew by 58 percentage point. This was not a price-led growth, this was a volume-led growth.

As you can see, our market share reached an all-time high of 20.6. I want to share a very specific highlight of our Stage 1 growth rate.

It grew by almost 68.8% when the whole IMF market declined by 3.5 percentage point. Everyone should be comfortable that this growth is sustainable.

We will continue to invest here. PNC, smaller business, but the key growth focus for us.

Our pet supplements business led by Zesty Paws grew by almost 16.5 percentage growth rate. This growth was sustained by our largest market North America, but also underpinned by our expansion efforts that has now started to grow in UK, Europe, and Asia.

We are also pleased to see that our turnaround strategy of Solid Gold has now started yielding results. In North America, we reported 6.3% like-for-like growth rate.

We want to accelerate our efforts for Solid Gold, and we will be sharing more details in the coming quarters on the progress of the business. This All this progress has led to strengthen our balance sheet.

We reduced the gross debt by 1 billion, and we were able to improve our leverage ratio to 2.05, 18 months ahead of the time reaching that target. Jason will share more details on the cash flow conversion as we progress onto that.

Innovation remains central to our growth rate for that, and we want to be a growth-led business for that. In ANC, Swisse continue to outperform in innovative category such as heart health, metabolism, and joint health.

For the last 12 months, almost 10.6% of NSR contribution came from NPD for our China business. In our ANZ business, magnesium, multivitamins remains our growth strategy for that.

That is us, we are able to grow ahead of the industry growth rate as well. BNC, product innovation remains an important driver of our consumer engagement and market share.

This is how we are able to drive accelerated retail scan sales growth compared to the market, which is in a decline. Pet nutrition, we want to drive innovation, but we want to be strategic in the segments that remains our area of strength.

We are one of the few companies who are able to launch disruptive products in the form of whether it's cat diffusers through innovative patented blending technology, or one of the first few companies in the supplements to launch a native canine, which is essentially the strains coming from the gut of a pet. We will continue to disrupt the market.

We will continue to grow ahead of the market through this disruptive approach onto that. Let me take you to our full-year outlook onto that.

Because of the strength of our business, as a management team, we are happy to upgrade our guidance for the whole business. We expect for 2026 our overall NSR growth rate to grow to mid to high teens.

Our EBITDA margin will be from mid to high teens. Below that, if we segment for our ANC business, we are upgrading our guidance from high single-digit to low-teen growth rate, which is underpinned by the continued success that we have seen across our existing core markets, China, ANZ, due to its online leadership and the superior execution and the innovative products contribution as well.

ANZ, while the market is slowing down, our pace of growth is not slowing down. We are launching products in our existing and gummies, which is central to our growth rate, and we remain confident as a management team to deliver this upgraded guidance.

For our BNC business, as everybody know, this year market declined by 3.5 percentage point for the first half, but we were able to grow by 58%. China remains 95% of our business, we are optimistic that we will deliver more than 30 percentage growth rate for the full year for our BNC business.

In terms of our pet nutrition business, we expect that our overall business will grow by high single-digit. There is no change in terms of our growth outlook either for our Solid Gold or Zesty Paws.

Our EBITDA margins will remain mid-single-digit. All this growth rate will be driven primarily through Zesty Paws investment into high-margin pet supplements business for the year.

If we move to ESG, during the first half of 2026, we continue to translate our ESG commitments into very tangible outcomes. We are a purpose-led company, and we want to be focused where we invest our efforts onto that.

One of the key achievements was 56% reduction in group-wide Scope 1 emissions, increased use of renewed electricity, and during the World Community Day, more than 50% of our employees participated into that. We also maintained our Hang Seng A+ and MSCI ratings, which were included in the S&P Global Sustainability Yearbook (China Edition) for the second consecutive year.

We remain committed to creating sustainable, long-term value for all our stakeholders and partners. Now, I will pass the floor to Jason to walk you through the financial performance of the first half 2026.

Thanks, Akash. Would like to highlight present financial highlights.

As you can see from page 14, for the interim revenue mix of the 2026, we are very happy that the two key categories of the group, the nutrition supplements and infant formula, continue to be the key revenue and profit contributors. Both categories achieved very healthy, strong, double-digit growth.

We continue to gain the market share for these two key categories in both the core markets and the new expansion markets. Within the nutrition supplement category, the two key segments, the VHMS products under the flagship brand of Swisse, and the pet supplement product category under the brand of Zesty Paws and Solid Gold, both also achieved the double-digit growth.

Then in terms of the the revenue mix by the geography, we continue to achieve the strong growth in the China mainland, North America, and other new territory markets. Within that, we can see for our ANZ market recorded a slight decline.

However, the this is a result of our strategic choice to deprioritize the corporate Daigou business. For the ANZ domestic business, we achieved very healthy 12% growth, outpacing the whole industry growth.

Overall, we see we have a more balanced and strong growth for all this core and the expansion markets. In terms of the the business segment mix, we have maintained a kind of balanced mix among the three segments.

In particular, for the ANC and the BNC segments, both achieved the strong double-digit growth. Within the PNC segment, the high-margin pet supplement business also achieved 16.5% growth.

Just for the Solid Gold business, which is mainly focusing on the pet food, we are still in the middle of the portfolio transformation, especially for Solid Gold China business. However, we are seeing this gradual turnaround, which we believe will contribute to the accelerated growth for the overall pet business going forward.

Then in terms of the the revenue mix by each segment in the the the regions we are operating, we maintain the differentiated regional focus aligned with the market opportunities we have secured in those key markets where we are operating. In particular, we are very happy to highlight a kind of very positive development is that within the ANC, the new expansion market, the contribution further went up by 1 percentage point from last year.

This showing really the positive result from the investments and efforts we have made to drive the growth in those high-growth potential expansion markets. Then in terms of the gross margin by the category, we're quite happy to achieve close to 3 percentage point improvement for our gross margin for the whole group.

This margin improvement is driven by the three positive factors. The first is the operating leverage based on the larger business scale of the all three business segments.

Secondly, is the continued product portfolio premiumization based on the rollouts of the new innovative products with approved functional benefits to the consumers. This helps also to improve the overall the gross margin for the category as well.

Thirdly, is thanks to the supply chain excellence we have achieved for all three segments, with the slow-moving stock provision has been significantly reduced in the first half for all three segments. Overall, this positive development of gross margin we will expect to continue for the rest of the year.

For the selling and distribution expense ratio of the sales, we also managed to reduce by 3 percentage points in the first half. This is mainly driven by the two factors.

The first is the the scale benefit we have achieved for the the BNC segment after the successful completion of the infant formula GB transition for the China market last year. Secondly, also due to the certain spending phasing for the ANC and also the BNC and PNC segments.

We see the investment would be necessary to drive the further new product rollout as well as the new market expansion in the second half, so that then we phased certain investments from the first half to the second half. We believe this S&D ratio investment is necessary to drive the continued growth of product development and market expansion going forward, and at the same time, still is to do it in a disciplined way in order to maintain a healthy profitability.

Then based on this positive development from the revenue, gross margin, and S&D, we achieved very high, healthy adjusted EBITDA margin for the overall group in the first half. As you can see, right, with the the development of the gross gross and EBITDA margin in the core markets, then we have developed this a proven track record to make the strategic investment in the new expansion markets to win in the future as well, so that then we expect the profitability of the new expansion markets will also go up to get close to the core markets in the long run.

Then regarding the adjustment principle, as you can see, we have taken the consistent adjustment principles to adjust the non-cash and non-recurring items for the first half of this year. The purpose of this adjustment is to show you the actual underlying business performance after the adjustment.

For the non-cash items this time, there are mainly the two kind of major items. One is the net fair value loss on our certain financial instruments.

This is related to the cross-currency swap we placed for our underlying US dollar term loan and the senior notes. As along along with the RMB appreciation against the US dollars in the first half, then we recorded the net fair value loss for those cross-currency swaps.

However, the placement of those swaps is really to protect our underlying debt instrument currency exposure, plus also the company can enjoy the upfront tangible interest saving through this hedging arrangement. The another major fair value loss is related to the FX change for our intergroup loans.

This is also the result of RMB appreciation against the US dollars in the first half. As since this is the kind of fair value loss for the intergroup loans, this is purely accounting treatment.

There is no actual cash loss to any third parties. That's why we believe by adjusting those non-cash items, then we can show you on the adjusted basis the true performance of the underlying business.

Regarding the liquidity update, we have maintained a very healthy cash position for the whole group, so that then ending June cash balance reached close to 2 billion RMB. Plus also, we reserved the un-drawn RMB credit lines of over 1.26 billion RMB available for drawdown for any kind of working capital needs later.

Plus, we also have the $20 million revolving credit facilities available for the company to drawdown as well. Based on the strong liquidity position we have maintained, we don't foresee any kind of need to drawdown the revolving credit facility in the any kind of short-term timeframe.

We believe we will continue to maintain this healthy liquidity position for the rest of the year. In terms of the leverage status, we have achieved very significant improvement of the overall leverage status in three areas.

First, on the left-hand side of this page, you can see the total gross debt got reduced by 1 billion RMB. As you may recall, we guided to the market at the beginning of the year, this year the gross debt reduction target is 5 to 700 million RMB.

Basically for the first half of this year, we already overachieved significantly this deleveraging target. Plus also, the mix of the debt instruments in the capital structure also got significantly optimized in the first half, so that now you can see the RMB and RMB-hedged debt contribution reached close to 98% of the total borrowing.

This matched better with our underlying cash flow and also to enable us to enjoy the more favorable interest cost. Then therefore, for our actual interest expense margin, we got further reduced down to 5.65%.

As you may recall, right, 2 years ago, our weighted average interest expense margin was close to 7%. We managed to reduce by 1 percentage point last year, and then for the first half this year, we further reduced to 5.65.

For the full year, we expect to further reduce to close to 5.5%. This really shows the continuous improvement of the overall finance cost, which will also contribute to the improvement of the underlying net earnings.

Then with this positive development of the capital structure, so that our net leverage ratio got also significantly reduced to 2.05 times. As you may recall, our peak time for the net leverage since the COVID was close to 4 times 4 years ago.

Then we have achieved this consistent deleveraging pass over the last 4 years. Plus also, we indicated to the market earlier that we would expect the net leverage to come down to close to 2 times by end of 2028.

With this positive development in the first half, we are very confident that we are achieving this overall the deleveraging target well ahead of our original plan. With this strong business underlying performance, as well as the healthy profitability and high cash conversion as just mentioned by our Chairman and also CEO, the whole management team is very confident we will continue this strong momentum so that then we can generate the healthy, sustainable return to our shareholders, to our bond investors, banking partners, as well other stakeholders.

That's the quick overview of our financial performance in the first half.

Thank you, Matt. Now, we have questions comes from Xinyan Pan from Luminescence.

Her question, there are two questions. The first question is, in the first half, other expense increased by over 200 million RMB to from 200 million over 200 million RMB to 404 million RMB.

Can you help to break down the change? Her second question is also, can the management have update on the ATO case?

Sure. I can I can answer this two financial-related questions.

The first question regarding the increase of the other expenses in the first half, actually, this is related to mainly the non-cash net fair value net fair value loss on our derivative financial instruments. As I just mentioned, this is one of the major adjustment items.

Again, for this fair value kind of loss is mainly associated with the RMB appreciation against the US dollars in the first half for the cross-currency swaps we placed for our underlying US dollar term loan and also underlying US dollar senior notes. As right, the nature of this swap is really to lock in the company's underlying currency exposure for the debt instruments, so that it's a net-net, right, while you have the other expenses for the fair value loss, then you can enjoy the benefit of underlying principal protection, plus also the upfront interest kind of saving.

Going forward, as just mentioned, we are going to continue to reduce our underlying US dollar-denominated debt, so that then the need for the cross-currency swap shall also get reduced. This is also from the source can reduce this kind of, say, the fluctuation of non fair value gain or loss impact on our P&L.

Regarding the second question on the management update on the ATO situation, so as we already announced on the 3rd of July, we received the official decision paper from the ATO after their one-year-long objection review. The result is pretty much similar to their original audit position, so that then according to the plan, the company filed our the appeal statement to the Federal Court in Australia in early July.

As you can see, the company has the full confidence that we have a very strong position to maintain, and there is no expectation for any kind of cash further cash outflow for the final conclusion of this case. Therefore, based on the advice and confirmation from our tax advisors, counsels, and also auditors, then for this interim result, there is no any provision required to be made for our P&L.

Plus, also cash flow-wise, we already placed 100 million Aussie dollars in July last year as the kind of deposit to ATO, and there's no further cash flow required for any further deposit from now to the end of conclusion of this case. Therefore, there's no any further impact on the company's cash flow.

If there is any further progress of this appeal process with the Federal Court, we will also keep the market posted.

Thank you, Jason. The next question comes from Deng Jiefeng from Dongwu Securities.

Regarding the infant milk formula business, how did the management view the overall market competitive landscape and its future growth its growth going forward?

Thank you, Mavis. We expect on our way that we, Biostime, to sustain the growth momentum in 2026 and beyond.

This will be coupled by many factors. One, product innovation.

HMO IMF further strengthens Biostime's premium positioning and consumer engagement. We are one of the only few imported brands to have this innovation into the China market.

New mother education is central to our volume-led growth rate, supporting strong early IMF performance and building healthy consumer pipeline. As I mentioned, our Stage 1, Stage 2 retail scan sales grew by 68.8 and 41.8, significantly outpacing the market.

Our number of new consumer for Stage 1 in first half of '26 was 550,000. Compared to FY '25, it was 750.

We have almost recruited 80% of that in the first half of it. Then, if we look at our Stage 1 and Stage 2 conversion is closer to 40 percentage points.

All the recruitment that we have done in the first half will underpin and drive the growth rate as we progress into second half and also 2027. Our channel replenishment, if you look at, remains very healthy.

Our POS is growing by 30 percentage point, and that will also maintain that we are able to drive accelerated growth. In terms of market share, as I had mentioned, our market share reached all-time high of 20.6 percentage point compared to number one, which is at 26.6.

We still have room

in the

In the super-premium In the super-premium segment to still narrow the gap. Also, if you look at we are yet to become number one.

We are close We are today number three imported IMF, and there are two more players. We can still narrow the gap with all the initiatives that we have outlined to reach to that level.

The number one player who's 11.4 and number two at 9.1, Biostime has opportunity to go from 5.8 and be among the top two players in the coming years.

Thank you, Akash. Next question comes from Susan from Dongwu Securities is regarding the Swisse business in China on the cross-border e-commerce tightening policy.

How does the management view that such cross-border e-commerce tightening policies going forward? Will it be more tightened?

Thank you, Susan. Let me take this one.

We, as a company, fully support the regulatory tightening. We believe it's a positive development for the long-term health of the industry, especially for well-established players like Swisse in the market.

Our view, stricter oversight will raise the entry barriers and probably accelerate even consolidation, which is very similar to what we saw when the new GB standards in the infant milk formula were implemented. It supports very sustainable and a quality-driven growth rate.

From our business perspective, we see minimal disruption and potentially share gains as we remain fully compliant, science-backed market leader with superior regulatory capabilities. As we, as a business, has been investing significantly resources both in upstream, which is in our supply chain, working closely with our contract manufacturers, but also downstream, knowing our consumer, working with regulators to develop robust traceability systems to ensure we are bringing the best products to the market.

We remain in full compliance and see this as a beneficial to our underlying business. Also, you could have seen that in terms of TikTok, as the market regulatory has tightening, Swisse has remained the beneficiary.

Our first half growth rate was 57 percentage point. If you look at on a YTD basis, the market on TikTok only grew by low double-digit of 12 percentage point.

We gained share. We remain a strong number three.

We don't want to be a price-led brand. We want to be a fully science-backed, compliant brand into the China market and other markets as well.

Thank you, Akash. The next questions is regarding the dividend payout.

We are seeing that the companies has increased the dividend payout for the first half, what do we expect the dividend payout for the full year? This is the first question.

The second question is regarding the PNC business in North America. What do you see the growth driver going forward for the second half and even for the 2027?

Thank you, Mavis. I can take on the first question, and Akash will answer the second question on the PNC growth.

For the dividend payout, based on the very strong, healthy liquidity status of the company, as well as the accelerated deleveraging we already achieved, the company decided to increase the dividend payout for the first half to 50% of the adjusted net profit. Actually, this is in line with our guidance to the capital market before, as you may recall.

For last year and also earlier this year, we have been communicating to the market is that after the company lowered the net leverage ratio to below 2.5 times, then our dividend payout will go back to the historical level of 50 to 70%. Therefore, based on this very strong result for the first half for both profitability and deleveraging, then we will implement this this return to normal dividend payout of the policy so that then first half payout is 50%, i.e., 460 million RMB.

Then for the the second half of this year, based on the very strong outlook of both the business growth and the cash flow generation, then we intend to maintain the same level of the payout for the full year. We believe this is in the best way for us to use of cash resource on one hand to continue to generate the cash for the work for the business growth needs, and also on the other hand to continue to use resource to further deleverage and also return to our shareholders.

This is a quite balanced and efficient use of our cash resource.

Thank you, Jason. I'll just echo the same thing from a Jason's perspective, right?

We are a growth-led company. As you can see, all our business units are profitable.

We generate significant cash flows to do that. We remain on track of deleveraging our balance sheet, and we are ahead of the track.

We want to ensure that we have both the growth outlook, but also incentivizing our shareholders who have sticked to us for the longest period of time as well. We believe that strong Thanks to our strong brands, we can continue to invest in accelerated growth.

That's why you can see there is no tapering down of our guidance. In fact, we remain confident in exceeding to expectations towards.

That's why we as a management team have recommended to increase our payout ratio back to historical levels to show the confidence that we have in our underlying business in the coming months and years towards it. We believe that's our best utilization of capital both internally and externally.

Second question from a PNC perspective, as I had mentioned, PNC is today our third largest vertical, representing 12.5. Zesty Paws remains the biggest revenue contributor for us.

We are today, majority, if we take a step back, Zesty Paws remains a North America theme. Almost 86% of revenues comes from North American market.

Even in a very mature market, our growth rate is close to high-teens, close to 17 percentage point. We are growing ahead of the category in the North America, which is growing at 7 to 8 percentage point.

We are driving incremental growth through innovative product and distribution gain into that. Our strategy is to replicate the same playbook that we had when we had acquired Swisse: strengthen our core business in North America and take the brand globally.

Big thanks to our footprint that we have built in the last 10 years in Asia, Europe, Australia, and China. We will be implementing the same playbook of extending the reach of Zesty Paws into other markets.

For us is driving the penetration of pet supplements into other markets using Zesty Paws as the growth lever for that. Our longer-term ambition is to take this revenue contribution, which is in low double-digit, closer to 20 percentage.

This, just for clarity, will not come at the expense of slowdown in any categories. This will come at the expense of driving accelerated growth and investment into this business segment in the coming years.

Thank you, Akash. The next question is regarding the Solid Gold business in China.

Any particular reasons for the decline of the Solid Gold business for the first half of 2026? What's the any future growth plan for Solid Gold China?

The third one is regarding the overall competitive landscape for the whole pet business in China. Can you share more color?

Thank you. I believe yes, the revenue growth rate of PNC business has declined by 37.7 percentage.

From a management perspective, we can confirm this is, in fact, in line with our expectation. As a background, I think we have communicated very transparently to the capital markets that we are in the midst of turnaround of our Solid Gold business to bring in terms of long-term growth and profitability.

This restructuring started from North America 2 years ago where we exited all the non-profitable or the ex-growth heavy-intensive channels like mom-and-pop shops. We want to be channels where we can drive growth, consumer demand, and consumption into that.

You could have seen that after a period of 2 years, North America has returned to positive growth rate of 6.3. This journey was over a period of 2 years implementation because any portfolio, supply chain transformation takes a longer period of time.

We as a management team also wants to reserve our efforts, capital by not doing two restruct- restructurings or turnaround in parallel. Given the success that we have seen in North America, we remain confident that the strategy that we're implementing of China to move away from low-margin products to high-margin segments is the right move.

As you can see, for the first half, 46% of our revenue came from high-margin segments. This is the right strategy.

What we need to drive is the incremental scale, and today we are in the investment phase of, with the portfolio transformation completed, now to invest behind marketing, consumer education, and the channel efforts to drive scale towards it. I'm very pleased to see that today the underlying growth momentum, while the NSR sees a drop, the innovation, we launched the first feline native probiotic product into the China market, and the overall consumer experience from the ground check has been positive and encouraging.

Our strategy is working. It's a question of next few months, we will be able to disclose much more positive underlying fundamental growth in terms of consumption with you to show the progress of that.

Our brand is in a good health, our strategy is the right, as you can see from the North America turnaround that we saw in the first half of 2026.

Thank you, Akash. The next questions goes to the cost cost impact.

Noticing the fish oil raw material cost has been rise for the recent months. How what's the impact for the rising cost for the fish oil have impact on the group's overall GP margin in the second half?

How will the management to mitigate such cost volatility?

Sure. Thanks for the question.

Overall, as mentioned in this page 19, we have achieved very significant improvement in the gross margin, despite the higher cost kind of pressure in the first half from certain kind of key ingredients such as like the fish oil, as well as the higher freight cost due to the geopolitical tension we have experienced in the first first half. To the company, we have been working very efficiently to deploy a series of the measures to mitigate the impact of those rising costs.

For example, for fish oil already, if you look at the market price, already doubled from the beginning of this year, right? Why the company can be very confident to maintain a stable gross margin, even with the gradual kind of improvement, is that, first, the continued product innovation and the premiumization, so that even in the fish oil category, as you can see, we have launched many new innovative products, for example, the high-strength fish oil with much higher concentration of omega- omega-3, DHA, and the EPA.

Also, we launched the innovative format such as like say mini fish oil. For those kind of products can really, on one hand, meet the better needs of the consumers for more effective products, functional benefits-wise, on the other hand, also can enable us to have a more premium mix in the overall product portfolio for the fish oil, so as to mitigate this higher raw material cost.

Secondly, also in terms of the supply chain excellence, then for the company, we have through the implementation of a new procurement kind of system to improve the overall forecast accuracy, so that then we can lock in the procurement of certain key ingredients well ahead of the actual production, so that then we can smooth the whole price volatility and locking the price for certain ingredients before it further went up. Therefore, actually, this kind of approach will continue for the second half as well.

Based on the current latest outlook, despite this continued inflation and the rising cost pressure for the second half, we feel confident that we can still maintain this stable, healthy gross margin level throughout the year.

I'll just add one point to that, right? As a company operating in global environment, we are not insulated to any market disruptions.

We all will be impacted in a similar way to do that. As Jason mentioned, one of the key things that we look at it, we are not going to be a price-led, COGS increase, price-led.

We want to be consumption-led, and that is coming through underlying investment into our products, consumer education as a part of that, right? That will be the key differentiating.

Across our three business verticals, innovation today is represented more than double digit of NSR contribution. This gives us the confidence, as Jason mentioned, that we can maintain our gross profit margins despite these market hiccups at this levels in the coming 2026 as well and going beyond to that.

Okay. Global player can share

the Global

player can increase the sourcing,

correct. As I think Fei has mentioned, right, if you look at, the common theme across our business verticals is nutrition supplements.

We do know that between our human supplements and pet supplements, there is a good chunk of overlap in terms of ingredient sources, whether it comes in the form of herbs or comes in the form of vitamins. We do leverage those learnings across our markets, even though production happens at different places, but we keep a good pulse as to what is the underlying driving factor towards it.

We are a global-led company, but we follow a decentralized approach in terms of making sure that we are not adding more cost and also helps us to invest behind underlying marketing to drive consumption.

Yeah.

Thank you, Jason and Akash. The next question is regarding the growth outlook.

Can the management broadly share the growth outlook for the three business segments over the next few years? This is the first question.

The second question is, how does the infant milk formula formula business growth momentum, will such growth momentum can be sustainable? The third question is, how can we see the Swisse business future growth driver?

Sure. I think as we have said at the onset of this results in the first half, we are very pleased to upgrade our outlook for 2026, which is now for the whole organization to grow at mid to high-teens.

We do want to give an overall assurance to the capital markets and our investors that we are a growth-obsessed and a profit-centered company. We will maintain our growth into ahead of the industry outlook.

At this moment of time, we are not yet in a position to give a very precise numbers or outlook for each of the business segments. As we have guided in our previous results announcements and communication, that the key way to measure our success is to drive ahead of the industry growth rate.

This can be seen in our all communications across Swisse, Biostime, and our pet nutrition business to grow ahead of the market share, look at that. To reiterate, we will continue to maintain a growth-led market into that.

Jason?

Okay.

In terms of IMF, as I have explained, our key theme remains China remains 95% of our consumption. We have been investing since the new GB transition a lot of efforts into new mother ed- education into that.

As you can see, that the way to look at IMF business is to see the underlying health of the Stage 1 and Stage 2. You can see on the page on the screen, 29, Stage 1 growth at 68.8, Stage 2 at 41.8.

Stage 3 remains the biggest chunk of the market, and we have seen a stable level of conversion of 40 percentage between Stage 1 to Stage 2. As all these new mothers have been recruited during the course of this year, and we do see the trend into July and August, that momentum is not slowing down, we do believe that we will enter into 2027 to grow ahead of the industry.

Our expectation is that IMF market will continue to slow down or grow into low single-digit, decline at slow single-digit. We will be able to define that through our innovation and also accelerated investment into the new mother education behind it to drive growth for overall business.

One point I want to add as I mentioned at the beginning, 2026 is first year of our three-year growth plan. We we we aim our company as the growth company.

It's not like keep the normal level. I think that for ANC and the PNC, the investor would believe that's a a big room to growth.

The question about the IMF, right? Because, yeah, generally, overall the China's IMF decline.

If we look back to the detail, the market share up year-to-date, H&H, we are 6.5% of the market share. We ranked number five.

We we do see we still have the room to to grow in this area. That's my my point.

Thank you, Akash and Fei. Here we come to the final questions from the floor is regarding the Douyin channel in Swiss for Swiss China.

Can the management share more colors on the development in the Douyin channel for Swisse in China? How can we expect the growth going forward?

In terms of the Douyin channel, I'm very happy to say that for our mainland China business, it represented 20% of our NSR, which is a very meaningful contribution to our overall business. If you look at on a YTD basis, the Douyin channel grew by almost 12.6 percentage point, whereas if you look at our growth rate was high, 57 percentage point.

We are a number three player. What we have seen as you have outlined when we came with Jason in the Q1 operating update, we see a lot of weaker players or the non-compliant players exiting this channel because of the compliance and because of the investment that is required.

Swisse, being one of the most professionally and well-run company, is taking the benefit of that in terms of driving it. As you can see, we are a number three brand into that.

We are not participating into any price-led way. We are participating through launching our disruptive innovation.

We launched AKK, which is a weight management com- brand, sorry, product, into China through Douyin. We also launched our NAG, a mobility product, and all of these are a premium-led innovation that has helped us to secure this accelerated growth rate onto Douyin channel for our China business.

Thank you, Akash. We have still have one final questions.

Can the management share the latest guidance with the whole market?

This I can quickly recap, right? Basically, we are quite happy to share with you that in comparison with the the guidance we provided to the capital market earlier this year, we would like to raise the the guidance for both the group and also each of the three segments, based on the strong growth momentum we have achieved in the first half and also the continued positive outlook for the second half.

On the group total, we target the top-line to achieve mid to high-teen growth. Then adjusted EBITDA margin for the full year to achieve mid to high-teen level.

As you may recall, the guidance earlier is to achieve that mid-teen level EBITDA margin, this time we raised to mid to high-teen. Then the same for the adjusted net profit margin, also we target to achieve mid to high single-digit, which also we increased from the mid-single-digit earlier this year.

Then under the group for each segment, for ANC, we target the low-teen growth and also the adjusted EBITDA margin to be around 20%, which also we lift up from high-teen EBITDA margin earlier this year to now close to 20%. For BNC, we also lift up the top-line growth for the full year to be over 30%, 3-0.

For the adjusted EBITDA margin, also to increase from before was just the mid-teen level, now to mid to high-teen level. Then for PNC, the top-line growth will achieve high single-digit.

Especially within that, the Zesty Paws will continue to achieve high-teen growth for the full year, while then for the Solid Gold, we will see just a flat or slight decline on the total base due to the need for the continuous recovery of the overall transformation of the portfolio. Then for the PNC EBITDA margin, to achieve around mid-single-digit.

With this concrete building blocks from the three segments, then we are quite confident for the whole group we can achieve mid to high-teen revenue growth and mid to high-teen EBITDA margin, as well as the mid to high single-digit net profit margin for the full year.