Overseas revenue accounts for less than 2%.
Walking into any shopping mall, you'll almost certainly spot that familiar blue and yellow signboard - "Men's Wardrobe" Hla Group Corp.,Ltd. This menswear giant, boasting over 7,200 stores, is now heading for a secondary IPO in Hong Kong.
In September 2025, Hla Group Corp.,Ltd. (600398.SH) announced its plan to launch a Hong Kong IPO, seeking H-share listing. Behind this strategic move lies the company's recent growth challenges. The 2025 first-half financial report shows net profit declined 3.42% year-on-year, with the main "HLA series" brand revenue falling 5.86% and a net reduction of 174 franchise stores. Most notably, the company's inventory has reached 10.255 billion yuan, up 7.35% from the same period last year, with inventory turnover days extending to 323 days.
Now, this fashion empire taken over by Tsinghua "second-generation" Zhou Lichen is accelerating overseas expansion seeking breakthroughs. As of the first half of 2025, overseas stores numbered 111, with overseas revenue growing 27.42% year-on-year, though still accounting for less than 2% of total revenue. The Hong Kong listing represents a crucial step in its globalization strategy, but facing 10-billion-yuan inventory pressure and dual challenges from domestic and international markets, Hla Group Corp.,Ltd.'s transformation path remains full of uncertainties.
**01 Owning 7,209 Stores, "HLA Series" Revenue Declines**
Hla Group Corp.,Ltd. originated from an underperforming wool textile factory, founded by Zhou Jianping. Around the 1990s, Zhou Jianping used his entire savings of 300,000 yuan to acquire a wool textile factory. Subsequently, Zhou traveled abroad for research and learning, transforming the textile factory step by step into today's Hla Group Corp.,Ltd.
In 2014, Hla Group Corp.,Ltd. debuted on the A-share market, becoming the first menswear stock. Currently, the company's business includes proprietary brand operations, international brand licensing and agency, group purchasing customization, and JD Outlets business.
Presently, Hla Group Corp.,Ltd. owns multiple proprietary brands, including the main brand "HLA," women's clothing brand "OVV," trendy brand "HLA JEANS," and baby/children's brand "YeeHoO." As of June 30, 2025, Hla Group Corp.,Ltd. operated 7,209 stores total, including 2,099 directly-operated stores, accounting for 29.12% of total stores.
Additionally, Hla Group Corp.,Ltd. has strengthened cooperation with international brands, becoming the authorized distributor for Austrian sports brand HEAD's apparel business in China and the exclusive authorized agent for Adidas FCC series products in mainland China retail.
While consolidating proprietary brands and international brand cooperation, Hla Group Corp.,Ltd. has also strengthened partnerships with leading enterprises in specialized sectors. In 2024, the company collaborated with JD to launch "JD Outlets" business, continuously expanding market share through multi-brand, omnichannel strategies to strengthen market competitiveness.
However, the boost from diversified business layout has not been significant. Data shows that in the first half of 2025, Hla Group Corp.,Ltd.'s revenue was 11.566 billion yuan, up 1.73% year-on-year, while net profit was 1.58 billion yuan, down 3.42% year-on-year.
Among these, the main "HLA series" brand revenue was 8.395 billion yuan, down 5.86% year-on-year. In terms of stores, "HLA series" franchise and other stores decreased by 174.
In recent years, Hla Group Corp.,Ltd.'s performance has shown significant volatility, with declining years being more frequent. Data shows that from 2020-2024, the company's operating revenue was 17.959 billion yuan, 20.188 billion yuan, 18.562 billion yuan, 21.528 billion yuan, and 20.957 billion yuan respectively, with year-on-year growth rates of -18.26%, 12.41%, -8.06%, 15.98%, and -2.65%; net profits were 1.785 billion yuan, 2.491 billion yuan, 2.155 billion yuan, 2.952 billion yuan, and 2.159 billion yuan respectively, with year-on-year growth rates of -44.42%, 39.60%, -13.49%, 36.96%, and -26.88%.
Currently, Hla Group Corp.,Ltd.'s main revenue still comes from the domestic market.
Data shows that from 2020-2024, domestic revenue was 17.334 billion yuan, 19.349 billion yuan, 17.686 billion yuan, 20.483 billion yuan, and 19.807 billion yuan respectively, accounting for 99.36%, 99.56%, 98.78%, 98.69%, and 98.24% of total revenue.
**02 Inventory Exceeds 10 Billion Yuan, 2.5 Billion Yuan in Advertising Over Five and Half Years**
Contrary to revenue and profit performance, Hla Group Corp.,Ltd.'s inventory continues to increase annually.
In fact, high inventory has always been a chronic problem difficult to cure in the apparel industry, with many companies even falling into operational difficulties due to inventory crises. As early as 2012, China's apparel industry experienced a large-scale inventory crisis, triggering a wave of store closures. Massive inventory accumulation led to companies' capital flow difficulties, ultimately forcing many brands to contract their operations. Among them, Meters/bonwe, Giordano, Jeanswest and other casual clothing brands that were once popular in the market were all affected by this impact.
Hla Group Corp.,Ltd. was not immune either. When it first applied for IPO in May 2012 but was rejected, industry insiders generally believed high inventory was the main reason for its listing failure. As of the end of 2011, its inventory scale reached 3.87 billion yuan, accounting for 56.94% of total assets, with inventory goods alone reaching 1.52 billion yuan. It wasn't until 2014 that Hla Group Corp.,Ltd. successfully went public.
After years of development, inventory remains the "Sword of Damocles" hanging over Hla Group Corp.,Ltd.
Data shows that in the first half of 2025, Hla Group Corp.,Ltd.'s inventory was 10.255 billion yuan, compared to 9.553 billion yuan in the same period last year.
In fact, Hla Group Corp.,Ltd.'s inventory already exceeded 10 billion yuan last year, and compared to five years ago, inventory has increased by 4.5 billion yuan. Data shows that from 2020-2024, inventory was 7.416 billion yuan, 8.12 billion yuan, 9.455 billion yuan, 9.337 billion yuan, and 11.987 billion yuan respectively, accounting for approximately 36.7%, 34.98%, 38.49%, 37.34%, and 53.39% of current assets.
While inventory increases, annual impairment losses are also substantial. Data shows that from 2020 to the first half of 2025, Hla Group Corp.,Ltd.'s inventory impairment was 852 million yuan, 987 million yuan, 928 million yuan, 635 million yuan, 860 million yuan, and 872 million yuan respectively.
In inventory classification, inventory goods and consigned goods are the two largest components. Data shows that from 2020 to the first half of 2025, Hla Group Corp.,Ltd.'s combined inventory goods and consigned goods were 6.937 billion yuan, 7.666 billion yuan, 9.035 billion yuan, 8.946 billion yuan, 11.613 billion yuan, and 9.89 billion yuan respectively, accounting for 93.54%, 94.41%, 95.56%, 95.81%, 96.88%, and 96.44% of total inventory.
The high proportion of inventory goods and consigned goods is closely related to Hla Group Corp.,Ltd.'s business model. It's understood that Hla Group Corp.,Ltd. adopts a light-asset chain operation model. Simply put, it acts as a "bridge" between suppliers and stores, achieving factory direct sales through product selection. Franchisees only need to pay franchise fees and payment for goods, with store management handled by Hla Group Corp.,Ltd., and unsold clothing can be returned to headquarters without bearing slow-moving inventory risk.
When stores return unsold clothes to headquarters without slow-moving inventory risk, this risk obviously falls on Hla Group Corp.,Ltd. headquarters. In fact, to boost sales and reduce inventory pressure, Hla Group Corp.,Ltd. has made considerable efforts, spending hundreds of millions of yuan annually on advertising.
Data shows that from 2020 to the first half of 2025, advertising expenses were 402 million yuan, 553 million yuan, 396 million yuan, 457 million yuan, 489 million yuan, and 282 million yuan respectively, with cumulative advertising investment exceeding 2.5 billion yuan since 2020.
**03 Tsinghua "Rich Second Generation" Takes Over, Accelerating Overseas Expansion**
"To deepen the company's global strategic layout and accelerate overseas business development" - this is how Hla Group Corp.,Ltd. explains its Hong Kong listing.
Hla Group Corp.,Ltd.'s overseas expansion began in 2017.
That year, Hla Group Corp.,Ltd. opened its first overseas store in Kuala Lumpur, Malaysia. Zhou Lichen, son of Hla Group Corp.,Ltd. founder Zhou Jianping and then-president of Hailan Group, stated at the store opening that he hoped the internationally-minded HLA brand could bring new fashion choices to Malaysian male consumers and promote exchange and integration of different fashion cultures.
Behind the overseas expansion, the "second generation" of Hla Group Corp.,Ltd. is making efforts.
Zhou Jianping's son Zhou Lichen was born in Jiangyin, Jiangsu in August 1988. In 2010, he graduated from Tsinghua University's School of Economics and Management with a finance major. After graduation, he worked at Shanghai Zhixin Capital in 2010, joined the family business Hla Group Corp.,Ltd. in 2012, made public appearances as Hailan Group's vice president in 2014, officially became Hailan Group president on February 8, 2017, was elected chairman of Hailan Group and strategic committee member on November 25, 2020, and succeeded his father Zhou Jianping as legal representative of Hailan Group on January 19, 2021.
The same year Zhou Lichen became Hailan Group president, Hla Group Corp.,Ltd. not only opened its first overseas store but also acquired overseas companies.
In November 2017, Hla Group Corp.,Ltd.'s subsidiary Hailan Clothing Co., Ltd. acquired 100% equity in EMPIRO MARKETING SDN.BHD and HEILAN GROUP MARKETING (MALAYSIA) SDN.BHD. held by HEILAN GROUP CO., LIMITED, with acquisition prices of 1.8729 million yuan and 4.55 million yuan respectively.
Regarding the acquisition, Hla Group Corp.,Ltd. explained: The equity acquisition was to meet the company's strategic needs for expanding overseas business, improve the company's overall business layout, enhance comprehensive competitiveness, benefit long-term development, and align with company and shareholder interests.
After 2017, Hla Group Corp.,Ltd. accelerated its overseas expansion. By the end of 2018, it had opened 21 stores just in Malaysia, and by 2019 owned about 40 stores in Southeast Asia. As of the first half of 2025, overseas stores numbered 111.
Actually, Southeast Asia is Hla Group Corp.,Ltd.'s overseas base camp. In 2017, Zhou Jianping established Hla Group Corp.,Ltd.'s basic internationalization strategy: rooted in Southeast Asia, radiating to Asia-Pacific, with global vision.
After years of development, Hla Group Corp.,Ltd. has established four types of stores in Southeast Asia: HLA concept, HLA men's clothing standalone stores, EICHITOO women's clothing standalone stores, and HLA lifestyle. It's understood that HLA lifestyle refers to Hailan Premium stores, mainly selling groceries, trendy toys and other categories, targeting mid-to-high-end market, with store areas ranging from 100-400 square meters and product pricing higher than domestic levels.
Currently, Hla Group Corp.,Ltd. continues Zhou Jianping's strategy. In the 2025 interim report, the company stated that while deeply cultivating Southeast Asian markets, it will orderly promote expansion in Central Asia, Middle East, Africa and other regions, expecting to open its first store in Sydney, Australia in the second half of this year.
Hla Group Corp.,Ltd.'s overseas revenue growth is also accelerating, achieving 206 million yuan in the first half of 2025, up 27.42% year-on-year.
However, overseas revenue still accounts for a relatively small proportion of Hla Group Corp.,Ltd.'s total revenue.
Data shows that over the past five years, overseas revenue has never exceeded 2% of total revenue. From 2020-2024, overseas revenue was 111 million yuan, 86 million yuan, 219 million yuan, 272 million yuan, and 355 million yuan respectively, accounting for 0.6%, 0.4%, 1.2%, 1.3%, and 1.7% of total revenue.
This Hong Kong listing is a key component of Hla Group Corp.,Ltd.'s accelerated overseas expansion. However, while accelerating overseas expansion, some realistic challenges must be faced, such as brand recognition, adapting to foreign cultural differences and consumption habits.
Additionally, overseas market expansion requires a rigorous supply chain system, and establishing supply chains in the early stage requires high costs, which will affect corporate profits - this is a challenge Hla Group Corp.,Ltd. will face.
Now, facing 10-billion-yuan inventory pressure, Hla Group Corp.,Ltd. seeks breakthroughs in overseas markets, but whether annual overseas revenue of less than 2% can win capital market favor remains unknown. Whether Hla Group Corp.,Ltd.'s Hong Kong listing will succeed awaits time's verification.
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