Company Reports

We will discontinue analyst coverage of Blue Moon on or about Aug. 24, 2026.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has expanded at a mid-single-digit compound annual growth rate in the past decade. Consumption premiumization coupled with rising per capita income has led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years. The company’s early entrance in the liquid soap market with competitive offerings has helped secure its number-one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater to shifting consumer preferences have resulted in satisfactory returns for Blue Moon.

Blue Moon's 2025 revenue fell 1.7% but net loss narrowed 57% to CNY 329 million, thanks to an 11% reduction in selling expenses. Gross margin slipped 90 basis points to 59.7% due to a 9.7% increase in palm oil-related input costs, partially offset by a better product mix.

Blue Moon has issued a preliminary profit report. It expects its 2025 net loss to narrow by at least 50% from 2024, driven by improving operational efficiency and adjustments to its online channel strategy.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has expanded at a mid-single-digit compound annual growth rate in the past decade. Consumption premiumization coupled with rising per capita income has led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years. The company’s early entrance in the liquid soap market with competitive offerings has helped secure its number-one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater to shifting consumer preferences have resulted in satisfactory returns for Blue Moon.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has expanded at a mid-single-digit compound annual growth rate in the past decade. Consumption premiumization coupled with rising per capita income has led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years. The company’s early entrance in the liquid soap market with competitive offerings has helped secure its number-one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater to shifting consumer preferences have results in satisfactory returns for Blue Moon.

Cautious household spending and aggressive pricing from new entrants in China’s detergent market continue to weigh on Blue Moon’s revenue growth.

Blue Moon reported a 3% decline in revenue for the first half, while selling expenses fell 13%. Net loss narrowed to CNY 435 million from CNY 664 million in the first half of 2024. Despite the continued losses, management raised the interim dividend by 100% year on year to HKD 0.08 per share.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has expanded at a mid-single-digit compound annual growth rate in the past decade. Consumption premiumization coupled with rising per capita income has led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years. The company’s early entrance in the liquid soap market with competitive offerings has helped secure its number-one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater to shifting consumer preferences have results in satisfactory returns for Blue Moon.

We note that the price of palm oil, a key ingredient for detergent, is on average 15% higher year to date compared with last year. In addition, competition in the detergent sector remains intense, as industry players are lowering prices to gain market share.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has grown at a CAGR of midsingle digits in the past decade. Consumption premiumization coupled with rising per capita income have led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years consecutively. Likewise, the company’s early entrance in the liquid soap market with competitive offerings has helped secured its number one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater for shifting consumer preferences have conferred satisfactory returns for Blue Moon.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has grown at a CAGR of midsingle digits in the past decade. Consumption premiumization coupled with rising per capita income have led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years consecutively. Likewise, the company’s early entrance in the liquid soap market with competitive offerings has helped secured its number one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater for shifting consumer preferences have conferred satisfactory returns for Blue Moon.

We raised our fair value estimate for narrow-moat Blue Moon by 4% to HKD 2.65 per share, after the firm delivered a 2024 pretax loss that was 12% better than our estimate. We view this result positively as operating expenses were lower than expected. Hence, we increased our 2025 earnings forecast by 17% , as we reduced our administrative expenses ratio estimate for 2025. However, our longer-term forecasts are largely unchanged. Our valuation implies a 41 times 2025 price/earnings ratio and a dividend yield of 3.6%. We think the shares are currently overvalued as Blue Moon is still facing challenges in balancing sales growth with controlling promotional expenses.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has grown at a CAGR of midsingle digits in the past decade. Consumption premiumization coupled with rising per capita income have led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years consecutively. Likewise, the company’s early entrance in the liquid soap market with competitive offerings has helped secured its number one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater for shifting consumer preferences have conferred satisfactory returns for Blue Moon.

We maintain our fair value estimate for narrow-moat Blue Moon at HKD 2.55 per share following its profit warning alert, which projects an expected net loss of HKD 700 million to HKD 750 million in 2024. This result was slightly better than our expectation due to reduced promotional expenses in the second half. However, we believe that Blue Moon’s near-term results should remain heavily influenced by promotional activities, which could pressure selling prices or increase operating expenses. We slightly cut our 2025-28 revenue and net income estimates by 2%-3% due to a lower 2024 top-line number. With Blue Moon currently trading at 19% above our fair value estimate and 61 times 2025 price/earnings, we think its shares are overvalued.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has grown at a CAGR of midsingle digits in the past decade. Consumption premiumization coupled with rising per capita income have led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years consecutively. Likewise, the company’s early entrance in the liquid soap market with competitive offerings has helped secured its number one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater for shifting consumer preferences have conferred satisfactory returns for Blue Moon.

We keep our 2024 earnings forecast for narrow-moat Blue Moon after reviewing its November online sales trend. We continue to expect strong top-line growth in the second half following the firm’s expansion in livestreaming platforms. However, we anticipate that margins remain depressed due to heavy discounts. We retain our fair value estimate of HKD 2.55 per share, which implies 44 times 2025 price/earnings and 15 times enterprise value/EBITDA. We see the stock as overvalued, with demanding valuations. We foresee soft consumer sentiment to weigh on the selling prices of Blue Moon’s products at least through the first half of next year. As a result, we expect the sales and marketing expenses ratio to stay elevated at 47% in 2025, compared with the average of 34% between 2019 and 2023.

Narrow-moat Blue Moon’s first-half results were largely in line with its profit warning announcement in July. Top-line growth was primarily driven by the online channels, but selling and distribution expenses doubled year on year due to the increased promotional expenses to drive sales growth. The first interim dividend since listing of HKD 0.04 per share was a positive surprise, indicating management’s intention to enhance shareholder returns despite being loss-making during the period. We now expect the firm’s dividend per share to be HKD 0.06 for full-year 2024, unchanged year on year. We cut our fair value estimate to HKD 2.55 per share, from HKD 2.67, to account for the lower cash balance given the dividend payout in 2024. We expect the 2025 dividend to remain stable before improving in 2026 on the back of earnings recovery. In our view, Blue Moon is currently undervalued, but its 2024 dividend yield of 2% is not attractive versus peers. We believe the firm will need to deliver earnings improvement before it can be rerated by investors.

As one of the major players in the home care sector in China, Blue Moon has been an early mover in terms of product innovation and channel penetration, which has driven above-industry sales growth in recent years. The majority of Blue Moon’s sales come from laundry detergent, where the market has grown at a CAGR of midsingle digits in the past decade. Consumption premiumization coupled with rising per capita income have led to a market transition from powder detergent to liquid detergent. Blue Moon was one of the early movers in the latter category and has been the market leader in terms of value share for the past 10 years consecutively. Likewise, the company’s early entrance in the liquid soap market with competitive offerings has helped secured its number one position during the same period, despite the advent of international peers such as Procter & Gamble and Reckitt Benckiser. These investments in products that could cater for shifting consumer preferences have conferred satisfactory returns for Blue Moon.

Despite a roughly 38% year-on-year increase in first-half 2024 revenue and higher gross margin, narrow-moat Blue Moon said that it would record a preliminary net loss of about HKD 665 million. The loss was mainly due to an increase in selling and distribution expenses as the company ramped up investments in channel expansion, especially in the livestreaming platforms. We have previously flagged the potential drag of higher channel expenditures, but the impact to Blue Moon's earnings was larger than expected. As a result, we cut our full-year 2024 earnings estimate to a net loss of HKD 936 million from a net profit of HKD 378 million. We also expect the impact of higher channel expenditures to persist in 2025 before normalizing in 2026. Hence, we lowered our 2025 earnings estimate by 22%, but our longer-term forecasts are largely unchanged.