Zhou Hei Ya International (1458) H1 2025 earnings summary

Executive summary

• As of June 30, 2025, operated 2,864 retail stores (1,573 self-operated, 1,291 franchised) across 292 cities in 28 provinces in China, down from 3,456 stores a year earlier, reflecting a strategic focus on quality and efficiency over scale.

• Revenue for the first half of 2025 was RMB1,222.6 million, a 2.9% decrease year-over-year, mainly due to closure of underperforming stores, but average sales per store increased and gross profit rose 2.7% to RMB716.6 million as operational efficiency improved.

• Net profit surged 228.0% year-over-year to RMB107.9 million, with net profit margin rising from 2.6% to 8.8% due to higher gross margin and cost controls.

• Operational improvements included supply chain optimization, channel expansion, and brand building, with significant progress in online and offline integration and membership growth.

• No interim dividend was declared for the period.

Financial highlights

• Revenue: RMB1,222.6 million (down 2.9% YoY); gross profit: RMB716.6 million (up 2.7% YoY); gross profit margin improved to 58.6% from 55.4% YoY.

• Cost of sales decreased 9.9% to RMB506.0 million, reflecting lower raw material prices and improved supply chain efficiency.

• Selling and distribution expenses fell 6.6% to RMB471.8 million; administrative expenses down 3.3% to RMB115.9 million.

• Profit before tax: RMB146.1 million (up 157.4% YoY); net profit: RMB107.9 million (up 228.0% YoY); basic and diluted EPS: RMB0.05 (up 400% YoY).

• Net cash from operating activities: RMB210.8 million, up from RMB193.8 million a year earlier.

Outlook and guidance

• Focus on refined operations, store performance, product innovation, and channel expansion, including overseas markets, especially Southeast Asia.

• Management expects continued improvement in profitability and operational efficiency amid a moderate recovery in consumer demand.

• Focus remains on improving store performance, cost efficiency, and brand rejuvenation to drive long-term growth.