Key takeaway

As a domestic oat industry leader, Seamild Food has long benefited from the trend toward healthier consumption, with its growth rate continuing to rise since its listing. Compared with overseas markets, China's oat category has substantial room for greater penetration; the company's core pure oat business remains solid, blended oatmeal is growing rapidly through “Oats+” innovation, and the company continues to expand in the health and wellness sector. On the channel front, the company continues to strengthen its offline presence through meticulous operations, further enhancing its advantages in KA and Class A/B supermarkets and achieving growth despite market headwinds, while actively expanding its reach through emerging channels such as O2O, community group buying, snack discount stores, and Douyin, with channel operating efficiency significantly outperforming peers. Lower oat grain procurement prices, coupled with the company’s continued product structure upgrade, are expected to unlock profit upside. The company is expanding into medicinal and edible sector, with the goal of creating another Seamild during the 2026–2030 period.

Event

The company released 1H26 earnings results

In 1H26, the company recorded operating revenue of RMB1.402bn, YoY +22.03%. Net profit attributable to the parent company reached RMB148mn, +81.88% YoY. Net profit attributable to the parent company excluding non-recurring items was RMB141mn, +81.53% YoY.

In 2Q26, the company recorded operating revenue of RMB578mn, +17.23% YoY; net profit attributable to shareholders of the parent company of RMB47mn, YoY +73.84%; and net profit attributable to shareholders of the parent company excluding non-recurring items of RMB44mn, +79.85% YoY.

Quick Take

Pure oat products see accelerating growth, with high-quality growth in 2Q

In 1H26, the company generated revenue of RMB508mn/RMB678mn/RMB95mn/RMB82mn from pure oatmeal/blended oatmeal/cold-eating oatmeal/other products, up 20.71%/22.01%/9.99%/76.86% YoY, respectively. The “Oats+” series generated nearly RMB200mn in sales and remained a core growth driver; pure oatmeal maintained growth of over 20% despite a high base, while organic oatmeal sales exceeded RMB100mn, up nearly 80% YoY, driving continued upgrades to the product structure. Sales of new food and medicinal ingredient powders and other nutritional powder products exceeded RMB70mn. New functional products expanded into new use cases, and new products contributed nearly 25% of total revenue.

By channel, the company’s revenue from the Southern Region and Northern Region reached RMB890mn and RMB488mn in 1H26, up 30.40% and 10.90% YoY, respectively. The Southern Region maintained strong growth momentum, benefiting from continued breakthroughs in the East China market and deeper channel penetration; the Northern Region remained stable. In 1H26, the company generated revenue of RMB722mn/RMB680mn from distribution/direct sales, up 14.20%/32.70% YoY, respectively. Offline snack discount retail channels recorded rapid growth of nearly 60% YoY, while the distributor network continued to be optimized and expanded; sales of the Grain Innovation Center product series through membershipbased supermarket channels such as FreshHippo and Sam's Club doubled YoY.

Lower raw material costs widen the gross margin-selling expense gap

On the cost side, the company's overall GPM was 44.03% in 1H26, up 0.45 pct YoY. The cost of oat raw materials imported from Australia remained relatively low, allowing raw material cost benefits to continue materializing. Coupled with economies of scale across the entire value chain, organic oats drove a 2.48-pct YoY increase in the GPM of plain oatmeal, collectively supporting a steady rise in the overall GPM. On the expense side, selling/administrative/R&D expense ratios were 26.39%/4.74%/0.45% in 1H26, down 3.50/0.16/0.04 pcts YoY, respectively. The selling expense ratio declined significantly as channel spending became more targeted, while workforce productivity and marketing spending efficiency continued to improve; the lower administrative expense ratio reflected improvements in the quality and efficiency of internal management. In 2Q26, the company's GPM increased by 0.5 pct YoY, its selling expense ratio decreased by 2.3 pcts YoY, and its NPM attributable to the parent company increased by 2.6 pcts YoY to 8.1%, extending the trend of improving profitability.

Building a new Seamild through food-medicine homology

2026 marks the first year of Seamild Food's “Six Five” plan. Seamild Food has clearly set out its core goal of “building a new Seamild” and achieving “dual growth in scale and value.” According to the planning, over the next five years, revenue and profit will double, and market capitalization will reach RMB10bn, corresponding to revenue of RMB5bn in 2030, with offline sales growing by 15% annually (10% from existing oatmeal products and 5% from new products), online sales growing by 20–25% annually, a CAGR of 16–18% for the core business, and RMB500mn from strategic acquisitions (10%). The Hebei base has established a strategy centered on “supporting powdered products with food products and restructuring its three major product portfolios”; the Suqian base is focusing on the dual drivers of “scale and profitability” to build a benchmark regional e-commerce base; and the Hezhou base is comprehensively upgrading its strategic positioning from “leadership in quality and cost” to “absolute No. 1 in quality and cost,” with a deep focus on products that deliver exceptional value for money and an all-out push to double its output value.

Earnings forecast : As the company continues to increase its market share, its potential for improved profitability is gradually being realized, and it is expected to enter a period of rapid earnings growth in 2026. We forecast the company’s revenue at RMB2.745bn/RMB3.342bn/RMB3.928bn and net profit attributable to the parent company at RMB266mn/RMB338mn/RMB402mn in 2026-2028. Maintain “Buy” rating.

Risks:

1. Intensifying competition: China's oat market remains fragmented. The company has continued to gain market share in recent years but still faces competition from international brands such as Quaker and Calbee, as well as emerging consumer brands such as Wangbaobao and OCAK. If competition intensifies, the company's profitability may fall short of expectations.

2. Raw material price fluctuations: Raw materials such as oat grains account for a significant portion of the company's production costs. A rise in raw material prices could substantially erode profitability. The company’s oat procurement costs in 2026 have declined YoY from 2025 levels. If raw material prices fluctuate in the future, unexpected price increases may cause the company’s profitability to fall short of expectations.

3. New business expansion falls short of expectations: the company's health and wellness product lines launched in recent years (such as medicinal and edible ingredient powders, probiotic protein powders, and oat milk) have yet to scale up. The market education costs for new products may make promotion more challenging. If new product promotion falls short of expectations, it may weigh on the company's performance.