Softcare’s revenue rose by 25% last year, while its profit increased 27%, as its focus on emerging markets yielded solid results
image credit: Bamboo Works
Key Takeaways:
- Softcare reported 25% revenue growth last year, led by a 134% rise in Latin America and double-digit growth in its core African markets
- The strong results put the diaper maker at the front of the pack of a new wave of Chinese companies chasing African consumers
The company known as the “African diaper king” has defied skeptics who said it couldn’t sustain its dominant position in its core Africa market, as well as other emerging markets it has entered more recently. Many of the new believers in Softcare Ltd. (2698.HK) cheered the release of the company’s inaugural annual results late last week by bidding up its shares nearly 15% in the two trading days after the announcement.
The company’s revenue rose by 24.9% year-over-year to $567 million last year, while its net profit was up 27.4% to $121 million. Its gross profit margin also rose from 35.2% in 2024 to 35.9% in 2025, another positive indicator.
Sales to its core markets in Africa rose by a healthy 22.5% to $545 million. The company is also moving out of Africa to find success in other emerging markets. The best example is Latin America, whose sales more than doubled to $22 million, just five years after it entered Peru in 2020, and added El Salvador in 2024. The company is also building a presence in Central Asia, where its sales, though quite small, more than doubled last year to $272,000.
After several years of declines, average selling prices (ASP) for Softcare’s two largest product lines rose between 4% and 7% last year, according to the results announcement. Baby diaper ASPs increased by 4.4% year-over-year, as that segment accounted for 78.6% of total revenue. Feminine hygiene product ASPs grew by 7% and made up 17.5% of revenue.
The ASP increases are important because they show the company is finding ways to convince consumers to pay more for its products in these famously price-sensitive markets, helping to maintain and even boost its margins. In a previous prospectus before its November IPO last year, the company reported its profit growth slowed to 54.1% in the first three quarters of 2024 from explosive 252% growth in 2023. A later filing showed the profit growth slowed further still to just 12% in the first four months …