In 1H26, the company recorded revenue of RMB1,054mn, up 17.7% YoY; net profit attributable to shareholders of the parent company of RMB225mn, up 20.0% YoY; and net profit excluding non-recurring gains and losses of RMB217mn, up 22.6% YoY. During the peak season, the mosquito repellent series achieved higher sales volume and prices, delivering strong growth; the infant and child care and essential oil series achieved mix-driven price increases. The overall gross margin improved significantly, with gross profit growth covering increased expense investment. Online channels accounted for 66.7%, with Douyin and Pinduoduo posting notable growth; offline channels saw strong sales growth through Sam's Club and Meituan O2O. The company remains committed to its integrated R&D, production and sales strategy of “big brands, niche categories.” We are optimistic that it can leverage the consumer recognition and trust established by its infant and child personal care brand to continuously expand its product portfolio and channels.

Event

The company released its 1H26 report.

In 1H26, the company recorded revenue of RMB1,054mn, up 17.7% YoY; net profit attributable to shareholders of the parent company of RMB225mn, up 20.0% YoY; and net profit excluding non-recurring gains and losses of RMB217mn, up 22.6% YoY. In 2Q26, the company recorded revenue of RMB787mn, up 20.1% YoY; net profit attributable to shareholders of the parent company of RMB172mn, up 20.3% YoY; and net profit excluding non-recurring gains and losses of RMB169mn, up 21.9% YoY.

Quick Take

Higher sales volume and prices for mosquito repellents drove mix improvement, while offline key accounts and instant retail contributed incremental growth

By category, the mosquito repellent series generated revenue of RMB481mn in 1H26, up 28.2% YoY and accounting for 45.7% of total revenue, making it the primary growth driver. In 2Q26, revenue reached RMB414mn, up 24.7% YoY and accounting for approximately 52.5% of quarterly revenue. Sales volume rose 12.0%, while the average price increased 11.3% to RMB5.83, reflecting growth in both volume and price. This was mainly attributable to a higher revenue contribution from higher-priced icaridin and DEET mosquito repellent liquids. The infant and child care series generated revenue of RMB441mn in 1H26, up 8.9% YoY and accounting for 41.9% of total revenue. In 2Q26, revenue reached RMB267mn, up 18.5% YoY and accounting for approximately 33.9% of quarterly revenue. Sales volume fell 10.2%, while the average price increased 32.0% to RMB13.45, driven by a higher contribution from higher-priced sunscreen products and the resulting mix improvement. The essential oil series generated revenue of RMB103mn in 1H26, up 12.4% YoY and accounting for 9.8% of total revenue. In 2Q26, revenue reached RMB91mn, up 12.3% YoY and accounting for approximately 11.5% of quarterly revenue. Sales volume fell 3.7%, while the average price increased 16.7% to RMB8.17. Gross margins for the mosquito repellent, infant and child care, and essential oil series were 56.5%, 64.0%, and 64.8%, respectively. During the reporting period, the company upgraded or launched more than 20 products, including several children's sunscreen products and mosquito repellents containing 15% icaridin or 15% DEET, further enriching its product portfolio.

By channel, online revenue reached RMB703mn, accounting for 66.7% of total revenue, with a gross margin of approximately 65.7%. Tmall and JD.com remained the core platforms, while Douyin and Pinduoduo delivered strong growth. Offline channels accounted for 33.3% of revenue. Sales through Sam's Club grew rapidly, O2O instant retail platforms such as Meituan gained momentum, and off-platform distribution covered retailers including Pangdonglai, Yonghui Superstores, and RT-Mart.

Gross margin improved significantly, with gross profit expansion offsetting higher expense investment

Gross margin reached 60.5% in 1H26, up 2.5 pcts YoY. Gross margin was 61.0% in 2Q26, up 2.9 pcts YoY, as product mix optimization enhanced profitability. On the expense side, the selling expense ratio was 32.3% in 1H26, up 2.1 pcts YoY, and 32.4% in 2Q26, up 2.6 pcts YoY, mainly due to increased investment in brand promotion and channel expansion. The administrative expense ratio was 1.7%, down 0.1 pct YoY, while the R&D expense ratio was 1.6%, down 0.2 pct YoY, reflecting effective cost control. The combined ratio of the three expenses was 35.7%, up 1.8 pcts YoY. Gross profit expansion offset the increase in expenses, while net profit excluding non-recurring gains and losses rose 22.6% YoY, outpacing revenue growth.

Continued execution of the “major brand, focused categories” strategy, with channel expansion and product portfolio enhancement progressing in tandem

During the reporting period, the company continued to execute its “major brand, focused categories” strategy. It strengthened its core infant and child care and mosquito repellent businesses, advanced online sales and offline penetration in parallel, and maintained a high market share. To expand market share, the company consolidated its core presence on Tmall and JD.com while accelerating its expansion on Douyin and Pinduoduo.

Offline, it rapidly scaled up its partnership with Sam's Club, entered O2O instant retail platforms such as Meituan, and expanded off-platform distribution to Pangdonglai, Yonghui Superstores, RT-Mart, Walmart, 7-Eleven, MNSO (9896.HK), Watsons, and other retailers, broadening both shelf presence and instant retail touchpoints. In terms of product development, the company upgraded or launched more than 20 products in 1H26. Its infant and child care portfolio expanded into sun protection and products for teenagers, with launches including children's mineral sunscreen serum lotion, children's moisturizing sunscreen day cream, children's sunscreen lotion, and children's lightweight sunscreen lotion. Its mosquito repellent portfolio was expanded with high-concentration formulations containing 15% icaridin or 15% DEET. The company held 126 patents in total. Channel expansion and product portfolio upgrades jointly supported market share gains and mix optimization.

Earnings forecast and investment recommendation: RUNBEN is focusing on the dual categories of mosquito repellents and baby and child care products, while offline key accounts and on-demand retail open up incremental growth opportunities. We are optimistic that RUNBEN will leverage the trust generated by its strong brand recognition in baby and child cleansing and care products to continuously enrich its product portfolio and expand its channels. We forecast net profit attributable to shareholders of the parent company of RMB375mn/RMB447mn/RMB518mn in 2026-2028, corresponding to PE multiples of 22x/19x/16x. We maintain our “Outperform” rating.

Risks

1. Risk of intensifying industry competition: The household and personal care products industry is highly competitive, with numerous well-known domestic and international companies and low market concentration. If the number of market participants continues to increase, traditional offline companies step up investment in e-commerce channels, and the company fails to sustain product development, supply chain optimization, an d market development, its production and operations will be adversely affected.

2. Risk of a declining birth rate: The baby and child care industry is correlated to some extent with the infant and young child population, and a declining birth rate will have a certain impact on the industry.

3. Risk of damage to brand reputation: Brand reputation is crucial to operations. Product quality issues or brand counterfeiting would adversely affect the company’s brand reputation and product sales.

4. Risk associated with the implementation of fundraising projects: The company is implementing projects including the Huangpu factory R&D and industrialization project and the channel development and brand promotion project. If significant changes in relevant factors prevent these projects from proceeding smoothly or the additional capacity is not absorbed promptly, the company’s production and ope rations will be adversely affected.