Hengan International (1044.HK, NC): APAC Consumer & Leisure Corporate Day 2026 Takeaways
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During Goldman Sachs's APAC Consumer & Leisure Corporate Day on July 2–3, 2026, Hengan International (1044.HK) management noted that pricing competition in tissue and sanitary napkin segments showed limited improvement in the first half of 2026. May tissue sales fell by mid-to-high single digits year-over-year, primarily dragged by dry tissue pricing pressure, while sanitary napkin sales were largely flat. Diaper sales continued to underperform, declining by high single digits.
Despite the intense competitive landscape, management is prioritizing profitability, brand equity, and premium positioning over chasing volume through price cuts. Wet wipes, though a smaller business, grew by high single digits in May and offer higher profitability. The company maintains its full-year 2026 target of mid-single-digit sales growth for both the tissue and sanitary napkin segments, driven by product differentiation and more ROI-focused advertising.
On the cost front, wood pulp prices are expected to remain moderate in the second half of 2026 due to increasing domestic supply. However, pressure from petroleum-related raw materials is emerging and may slightly compress gross margins in the third quarter. Management does not plan price increases, expecting the impact to remain manageable. Additionally, Hengan faces headwinds from an RMB 100 million foreign exchange loss in May and anticipates government subsidies will be lower than in 2025, adding further pressure to near-term earnings.