The company released its 2025 interim report, achieving revenue of 28.20 billion yuan in H1 2025, down 15.57% year-over-year; net profit attributable to shareholders reached 1.75 billion yuan, down 40.71% year-over-year; adjusted net profit attributable to shareholders was 1.33 billion yuan, down 52.60% year-over-year. In Q2 alone, revenue reached 13.19 billion yuan, down 19.80% year-over-year; net profit attributable to shareholders was 0.55 billion yuan, down 57.64% year-over-year; adjusted net profit attributable to shareholders was 0.27 billion yuan, down 78.08% year-over-year.
Operating pressure persists with Q2 2025 revenue declining year-over-year. In Q2 2025, the company's fresh products/packaged products/franchisee management achieved revenues of 9.68/1.09/0.13 billion yuan respectively, down 23.27%/21.26%/26.54% year-over-year. By product category, poultry/livestock/vegetables declined by 24.35%/34.85%/16.01% respectively. By region, Southwest/Northwest/Central China/South China/East China/North China/Hong Kong, Macau, Taiwan and overseas markets declined by 25.12%/17.93%/35.55%/52.39%/1.43%/41.20%/15.16% respectively year-over-year.
Q2 2025 saw continued adjustments, primarily impacted by excessive store closures, while individual stores also faced certain pressures. Revenue scale effects diminished, leading to significant profit decline in Q2 2025. The company's gross margin in Q2 2025 was 28.9%, down 1.6 percentage points year-over-year. Overall raw material prices remained relatively stable, with the decline likely attributed to manufacturing cost allocation impact. On the expense side, selling expense ratio increased by 0.4 percentage points year-over-year, and administrative expense ratio increased by 2.8 percentage points year-over-year, mainly due to increased employee compensation, while other expenses had minimal impact. Ultimately, the company's net profit margin attributable to shareholders in Q2 2025 was 4.2%, down 3.8 percentage points year-over-year.
Short-term pressures continue, but active adjustments are being made to break through difficulties, with expectations for same-store improvements and store count inflection points to arrive soon. In the first half of the year, the company: first, responded to demand changes by exploring tiered operations, investigating subdivision consumer scenario demand changes, attempting to deconstruct core appeals of dining accompaniment, snacks, late-night meals, and gift consumption scenarios, and continuously improving consumer profiles based on differentiated characteristics of various consumer groups; second, adjusted innovation systems and optimized product matrix by exploring regional flavor databases and constructing modular new product development processes, while simultaneously advancing flavor optimization of classic products and efficient incubation of new products; third, strengthened channel synergy and enhanced operational resilience by attempting to build a digital-intelligent operation system covering all scenarios, improving overall efficiency of omnichannel networks and full-domain synergy capabilities; fourth, flexibly built foundations for the future and drove agile growth by leveraging agile supply chain systems, optimizing national market dynamic scheduling mechanisms, and strengthening material allocation capabilities to address challenges from regional demand fluctuations and market changes.
The company is currently still actively adjusting. Considering store closure pace within the year, operations are expected to face continued pressure. Attention should be paid to Q4 performance after the lower base effect, with expectations for same-store improvements and store count inflection points to arrive soon.
Risk factors include downstream demand weakness, intensified market competition, increased expense deployment, and food safety issues.
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