Net profit contribution exceeds 40%! Why has Wanglaoji become Baiyun Mountain's "strongest profit engine"?

How did Wang Lao Ji achieve profit growth that surpasses revenue?

Produced by | Zhongfang Network

Reviewed by | Li Xiaoyan

On March 20, Guangzhou Baiyunshan Pharmaceutical Group released its annual report for 2025, delivering a robust growth report: annual revenue of 77.656 billion yuan, a year-on-year increase of 3.55%; net profit attributable to the parent company of 2.983 billion yuan, a year-on-year increase of 5.21%. As the natural beverage business, the second growth curve of the group, achieved a net profit contribution rate of over 40%, becoming Baiyunshan’s most solid profit pillar amid the industry’s transition into stock competition. Among them, the Wang Lao Ji Health Company achieved a net profit of 1.202 billion yuan for the year, steadily climbing year-on-year, continuously maintaining its dual status as the leader in the herbal tea industry and a core profit center for the group.

This annual report not only confirms Wang Lao Ji’s dominance in the herbal tea segment but also showcases the transformation resilience of a traditional national brand in the waves of health, diversification, and globalization. In an environment of slowing market growth and increasingly fierce competition, Wang Lao Ji has charted a high-quality development path with a strategy of “stabilizing the fundamentals, expanding new tracks, and pursuing internationalization.”

In 2025, the Baiyunshan natural beverage business achieved revenue of 9.672 billion yuan, a slight year-on-year decrease of 0.34%, but the main operating costs fell by 4.22% year-on-year, and the gross profit margin increased by 2.21 percentage points to 45.33%, demonstrating an optimization trend of “slight revenue adjustment and profit quality improvement.” The core business, Wang Lao Ji Health Company, achieved annual revenue of 8.786 billion yuan, a slight increase of 0.23% from the previous year; operating profit rose from 3.742 billion yuan to 3.946 billion yuan, and net profit climbed from 1.104 billion yuan to 1.202 billion yuan, with profit growth significantly outpacing revenue growth, and operational efficiency continuing to improve.

Financial report data shows that Wang Lao Ji Health Company is one of the two subsidiaries under Baiyunshan that contribute more than 10% to net profit, and it has become the group’s largest profit source with a contribution rate of over 40%. This performance is particularly valuable amid the pressure on the pharmaceutical sector and intensified competition in the health industry. Behind this is Wang Lao Ji’s meticulous operations in cost control, channel structure, and product structure, as well as the strong profitability supported by brand premium.

Brand strength is the core support for profit resilience. According to the China Brand Power Index (C-BPI), Wang Lao Ji Herbal Tea has topped the herbal tea industry for nine consecutive years, achieving the highest brand score among non-alcoholic beverages in 2025. As the creator and market leader of the herbal tea category, Wang Lao Ji has formed a solid scene of “festival gifts + ready-to-drink + family consumption,” with seasonal fluctuations and festive sales complementing each other, building an unreplicable competitive barrier.

Both capacity and capital aspects have also solidified the foundation. In 2025, Wang Lao Ji Health Company’s registered capital increased from 900 million yuan to 1 billion yuan, and the four major production bases in Nansha, Guangzhou; Lanzhou, Gansu; Ya’an, Sichuan; and Meizhou, Guangdong are operating in synergy, and the national supply chain layout has been completed, providing assurance for stable scale and controllable quality.

According to the iMedia Consulting “2026 Insights on China’s Herbal Tea Beverage Consumption Trends” white paper, the scale of China’s herbal tea market reached 25.5 billion yuan in 2025, expected to grow to 33.67 billion yuan by 2030, with the industry transitioning from rapid expansion to meticulous competition in existing stock. Currently, the herbal tea market has formed a stable pattern led by the dual giants Wang Lao Ji and Jia Duo Bao, with a concentrated market share, and the competition focus has shifted to channel penetration, scene innovation, and engagement with young demographics.

In response to the new normal of the industry, Wang Lao Ji has chosen to respond with “stability.” In terms of sales models, it adopts a three-tier distribution system as its framework, where first-tier merchants are responsible for regional development, second-tier merchants for distribution, and the brand side directly invests in advertising and terminal operations, balancing channel efficiency and control. In the core battlefield of dining, the company continues to enhance coverage and scene penetration, reinforcing high-frequency scenarios such as hot pot, barbecue, and Sichuan cuisine in line with the “spicy culture” consumption trend; at the same time, it increases promotions for bottled products to solidify the ready-to-drink channel advantage, shifting herbal tea from “festive consumption” to “daily drinking.”

It should not be overlooked that the demand in the beverage market is becoming increasingly fragmented, with new categories diverting consumers and changing preferences among younger consumers putting growth pressure on traditional herbal tea. However, Wang Lao Ji, with its product gene of the same origin in medicine and food, national brand recognition, and comprehensive channel coverage, continues to maintain its fundamentals and lead in stock competition.

Dependency on a single category is a common challenge for mature brands. Baiyunshan has clearly stated in its financial report: focus on health-oriented and functional sub-tracks to cultivate a second growth curve. To achieve this goal, Wang Lao Ji has built a diversified matrix of “core herbal tea + specialty fruit drinks + functional beverages.”

In the specialty beverage line, the Citingji series relies on the Guizhou prickly pear resources, quickly gaining traction with a health positioning of natural high vitamin C, zero fat, and no preservatives; the Lixiaojiji series focuses on Lingnan lychee, launching innovative forms such as sea salt lychee and sparkling water to meet light health needs; and the Coconut Soft coconut juice enters the plant protein sector, enriching product choices. In 2026, the company will deepen brand building for Citingji and Lixiaojiji, promoting category upgrading and market penetration.

In terms of new product releases, products such as Guo Yaoshuang fruit juice and Flash Charge electrolyte water have become key breakthrough directions. Guo Yaoshuang enters the ready-to-drink fruit juice market with flavors such as lychee and yellow peach, while Flash Charge electrolyte water targets hydration scenarios like sports, outdoor activities, and office settings, catering to the functional needs of Generation Z and young consumers. This diversified layout not only reduces reliance on a single herbal tea category but also reserves momentum for medium- to long-term growth.

From an industrial value perspective, Wang Lao Ji’s new product expansion is not merely a trend-following move but relies on Baiyunshan’s traditional Chinese medicine resources and herbal research capabilities, pursuing a differentiated route of “natural, healthy, and herbal,” which distinguishes it from homogenized beverages in the market, and the long-term growth potential is promising.

The year 2025 is a key year for Wang Lao Ji’s internationalization. The company is accelerating the export of natural beverages, establishing strategic partnerships with companies such as Saudi Al-Duq, Shanghai Baosteel Packaging, South Korea’s Nongshim, and Japan’s Futaba Industry, and launching overseas localization operation projects. It has also introduced the international brand identity “WALOVI,” with international cans launched in markets like Germany, Australia, Singapore, and Malaysia, connecting with global consumers using localized brand language and product forms.

The significance of global layout is profound: on one hand, the overseas Chinese market and health beverage-demanding markets in Southeast Asia and the Middle East provide incremental space for herbal tea; on the other hand, internationalization promotes the upgrade of the brand from a national brand to a global brand, enhancing long-term valuation and risk resistance. In the context of a saturated domestic market, overseas markets will become the next important growth pole for Wang Lao Ji.

Objectively speaking, Wang Lao Ji still faces multiple challenges: the growth rate of the herbal tea industry is slowing, competition in dining channels is heating up, the release of new products still needs time, and the second growth curve has not yet fully formed. However, these challenges are common industry issues rather than individual shortcomings.

Baiyunshan’s 2026 plan provides a clear solution: consolidate the leading position through full-cycle marketing, increasing market share through period linkage, channel refinement, and product upgrades; activate young consumption through brand revitalization, strengthening the fashion image via joint promotions, celebrity endorsements, cross-industry marketing, and international releases; and cover all scenarios with a diversified product layout, ensuring parallel development of ready-to-drink, functional, and health tracks.

Overall, Baiyunshan’s 2025 annual report delivers not just a financial answer but also serves as a model for the transformation and upgrading of traditional brands. Wang Lao Ji, with a net profit contribution of over 40%, demonstrates that the fundamentals are sufficiently stable; with diversified new products and globalization efforts, it proves that future space is large enough. In the grand trend of health consumption upgrades and the rise of national tide, Wang Lao Ji is transitioning from “the number one in herbal tea” to a platform enterprise in natural health beverages, balancing stability and innovation, and addressing both short-term profits and long-term growth.

As the second growth curve gradually takes shape and globalization continues to be implemented, Wang Lao Ji is expected to create increments in the stock market, maintain a leading position amid industry changes, and provide a replicable growth model for Baiyunshan and even the Chinese health beverage industry.