Hengan International Group's first-half profit has dropped 19.34 per cent from a year earlier to HK$129.15 million.
The maker of sanitary napkins yesterday attributed the lower profit to the rising cost of raw materials and to intense competition in the mainland.
'Oversupply of sanitary napkins, especially low-end ones, persists, and the market growth continues to slow down,' executive director Xu Lianjie said.
More than 99 per cent of Hengan's sanitary napkins are sold in the mainland.
In the half, the price of fluff pulp - the main material in the manufacture of sanitary napkins - had risen 30 per cent from previously, Mr Xu said.
As a result, Mr Xu said, Hengan's gross profit margin fell to 39.3 per cent from 41 per cent.
Turnover in the half rose 1.83 per cent from a year earlier to HK$553.8 million.