Sun Art Retail Group (6808) H2 24/25 earnings summary

Executive summary

• Achieved a turnaround to profitability with net profit of RMB386 million for FY 2025, compared to a net loss of RMB1,668 million in the previous year.

• Revenue for the year ended 31 March 2025 was RMB71,552 million, down 1.4% year-over-year, mainly due to store closures and scaling down of supply chain business.

• Same store sales growth turned positive at 0.6%, reversing a negative trend from the prior year.

• Focused on sustainable multi-format store expansion, community hub concepts, and enhanced product and pricing strategies.

• Proposed final dividend of HKD0.170 per share, subject to AGM approval.

Financial highlights

• Gross profit was RMB17,236 million, down 4.0% year-over-year, with gross margin at 24.1%.

• EBIT improved to RMB1,425 million from a loss of RMB1,009 million last year; EBIT margin rose to 2.0%.

• Adjusted profit for the period was RMB692 million, with an adjusted net profit margin of 1.0%.

• Net cash position was RMB12,529 million, down RMB3,975 million year-over-year, mainly due to dividends and prepaid card balance reduction.

• Expense rate dropped to 23.6%-23.7%, approaching pre-pandemic levels due to cost optimization.

Outlook and guidance

• Focus remains on omni-channel integration, comparable store growth, and refining the membership store model.

• Continued optimization of product mix, pricing, and operational efficiency, with digitalization and modular testing planned for FY 2026.

• Expansion to prioritize supermarkets and community hubs, with careful selection of locations.

• Strategies in merchandise, pricing, efficiency, store network, talent, and membership to support future growth.

• Membership store model to be refined and expanded, with ongoing product and experience enhancements.