HONG KONG, Oct. 21, 2025 (GLOBE NEWSWIRE) -- Happy City Holdings Limited (Nasdaq: HCHL) (the "Company"), an established all-you-can-eat hotpot restaurant operator in Hong Kong , today announced its unaudited financial results for the six months ended February 28, 2025 (the "First Half of Fiscal Year 2025").
Financial Highlights for the First Half of Fiscal
Year 2025
For the six months ended Variance
-------------------------- ------------------------
February 28, February 29,
2025 2024 Amount Percentage
------------ ------------ ---------- ------------
US$ US$ US$ %
------------ ------------ ---------- ------------
(Unaudited) (Unaudited)
Revenue $ 4,160,099 $ 3,437,904 $ 722,195 21.0%
Cost of
revenue (3,113,028) (3,043,454) (69,574) 2.3%
---------- ---------- -------- -------
Gross
profit 1,047,071 394,450 652,621 165.5%
Total
operating
expenses (638,812) (558,345) (80,467) 14.4%
---------- ---------- -------- -------
Income
(loss)
from
operations 408,259 (163,895) 572,154 (349.1)%
Total other
(expense)
income,
net (100,999) 30,765 (131,764) (428.3)%
---------- ---------- -------- -------
Income
(loss)
before
income
taxes 307,260 (133,130) 440,390 (330.8)%
Income tax
(expense)
benefit (22,272) 42,885 (65,157) (151.9)%
---------- ---------- -------- -------
Net income
(loss) $ 284,988 $ (90,245) $ 375,233 (415.8)%
========== ========== ========
-- Our revenue increased by US$722,195 or 21.0%, from US$3,437,904 for the
six months ended February 29, 2024 to US$4,160,099 for the six months
ended February 28, 2025. Such increase was mainly attributable to the
upward adjustment in our selling price of our food in August 2024 and the
opening of one new restaurant located in Kwun Tong during the six months
ended February 28, 2025.
-- Our overall gross profit increased by US$652,621 or 165.5%, from
US$394,450 for the six months ended February 29, 2024 to US$1,047,071 for
the six months ended February 28, 2025. Our overall gross profit margin
increased from 11.5% for the six months ended February 29, 2024 to 25.2%
for the six months ended February 28, 2025. Such increase in our overall
gross profit and gross profit margin was mainly attributable to (i) the
increase in our revenue as a result of the upward adjustment in our
selling price of our food in August 2024 and the opening of one new
restaurant located in Kwun Tong during the six months ended February 28,
2025 as stated above; and (ii) our successful negotiation with our
suppliers and also sourcing new suppliers which supply us with the same
quality of food and beverages but at a reduced cost, which led our cost
of food and beverages remained relatively stable for the six months ended
February 28, 2025, as compared to the six months ended February 29, 2024.
-- We reported net income of US$284,988 for the six months ended February
28, 2025 and net loss of US$90,245 for the six months ended February 29,
2024.
Financial Results for the First Half of Fiscal Year 2025
Revenue
Our revenue is generated from providing food and beverage to customers in our restaurants located in North Point, Kwun Tong, Mong Kok and Tsuen Wan. The following table sets forth the breakdown of our revenue by location of our restaurants for the six months ended February 28, 2025 and February 29, 2024, respectively:
For the six months ended Variance
------------------------------- -----------------------
February 28, February 29,
2025 2024 Amount Percentage
--------------- -------------- --------- ------------
US$ US$ US$ %
--------------- -------------- --------- ------------
(Unaudited) (Unaudited)
Revenue
North
Point $ 1,259,198 $ 1,142,755 $116,443 10.2%
Kwun
Tong 255,378 -- 255,378 N/A
Mong
Kok 1,608,812 1,480,107 128,705 8.7%
Tsuen
Wan 1,036,711 809,866 226,845 28.0%
Others -- 5,176 (5,176) (100.0)%
--- ---------- ---------- ------- --------
Total
revenue $ 4,160,099 $ 3,437,904 $722,195 21.0%
=== ========== ========== =======
Our revenue increased by US$722,195 or 21.0%, from US$3,437,904 for the six months ended February 29, 2024 to US$4,160,099 for the six months ended February 28, 2025. Such increase was mainly attributable to the upward adjustment in our selling price of our food in August 2024 and the opening of one new restaurant located in Kwun Tong during the six months ended February 28, 2025.
Others represent the revenue recognized for the expiry of membership points in our loyalty program.
Cost of Revenue
Our cost of revenue consists of cost directly related to revenue generating activities, which primarily includes food and beverages cost, operating expenses for the hotpot restaurants, personnel-related compensation expenses, including salaries and related retirement benefit for operations personnel, and other cost directly related to the revenue.
The following table sets forth the breakdown of our cost of revenue for the six months ended February 28, 2025 and February 29, 2024, respectively:
For the six months ended Variance
---------------------------- -----------------------
February 28, February 29,
2025 2024 Amount Percentage
------------- ------------- --------- ------------
US$ US$ US$ %
------------- ------------- --------- ------------
(Unaudited) (Unaudited)
Cost of revenue
Food and
beverages $ 1,226,775 $ 1,225,912 $ 863 0.1%
Payroll and
employee
benefits
expenses 635,998 671,321 (35,323) (5.3)%
Utilities
expenses
(restaurants) 101,913 92,437 9,476 10.3%
Building
management
fee
(restaurants) 218,497 182,325 36,172 19.8%
Depreciation
of property
and
equipment 292,208 274,221 17,987 6.6%
Operating
lease
expenses 439,354 402,177 37,177 9.2%
Others 198,283 195,061 3,222 1.7%
--------- --------- ------- -----
Total cost of
revenue $ 3,113,028 $ 3,043,454 $ 69,574 2.3%
========= ========= =======
Our cost of revenue remained relatively stable at US$3,113,028 and US$3,043,454 for the six months ended February 28, 2025 and February 29, 2024, respectively.
Food and Beverages
Our cost of food and beverages remained relatively stable at US$1,226,775 and US$1,225,912 for the six months ended February 28, 2025 and February 29, 2024, respectively.
Payroll and Employee Benefits Expenses
Restaurant operation is highly service-oriented and labor-intensive. Payroll and employee benefits expenses of operation personnel, which primarily consisted of salaries and other allowances and retirement benefit scheme contributions of operation personnel. Our payroll and employee benefits expenses remained relative stable at US$635,998 and US$671,321 for the six months ended February 28, 2025 and February 29, 2024, respectively.
Utilities Expenses (restaurants)
Our utilities expenses for our restaurants primarily consist of expenses incurred for electricity, gas and water utilities for the operation of the restaurants. Our utilities expenses for restaurant remained relatively stable at US$101,913 and US$92,437 for the six months ended February 28, 2025 and February 29, 2024, respectively.
Building Management Fee (restaurants)
Our building management fee for our restaurants increased by US$36,172 or 19.8%, from US$182,325 for the six months ended February 29, 2024 to US$218,497 for the six months ended February 28, 2025. Such increase was mainly attributable to the addition of one new restaurant located in Kwun Tong during the six months ended February 28, 2025.
Depreciation of Property and Equipment
Our depreciation of property and equipment for the operation of our restaurant remained relatively stable at US$292,208 and US$274,221 for the six months ended February 28, 2025 and February 29, 2024, respectively.
Operating lease expenses
Our operating lease expenses in relation to right-of-use assets for the operation of our restaurant increased by US$37,177 or 9.2%, from US$402,177 for the six months ended February 29, 2024 to US$439,354 for the six months ended February 28, 2025. Such increase was mainly attributable to the addition of one operating lease for our new restaurant located in Kwun Tong during the six months ended February 28, 2025.
Other Expenses
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