China Foods (506) H1 2025 earnings summary

Executive summary

• Revenue for 1H 2025 was RMB 11,363 million, down from RMB 12,278 million in 1H 2024, reflecting a year-over-year decline.

• Net profit for 1H 2025 was RMB 578 million, a decrease from RMB 978 million in 1H 2024.

• Gross profit also declined to RMB 966 million from RMB 1,200 million year-over-year.

• Revenue for the six months ended 30 June 2025 rose 8.3% year-over-year to RMB12,278.1 million, with sales volume up 5.5%.

• Gross profit margin improved by 3.5ppt to 38.1%, driven by lower procurement prices for most raw materials.

Financial highlights

• Gross profit ratio decreased to 34.6% in 1H 2025 from 38.1% in 1H 2024.

• Net profit margin dropped to 5.1% from 8.0% year-over-year.

• EPS fell to RMB 0.20 from RMB 0.21 in the prior year period.

• Net profit attributable to owners was RMB577.8 million, up from RMB565.2 million year-over-year.

• Distribution and selling expenses margin increased by 3.8ppt to 26.3% due to higher marketing costs.

Outlook and guidance

• Management expects stable growth in the second half of 2025, supported by macroeconomic policies and continued consumer demand.

• Raw material prices are expected to remain stable, but risks from potential trade wars could impact costs.

• Focus remains on product structure upgrades and business portfolio optimization to improve gross profit margin.

• Smart Retail revenue grew 10% and vending machine count increased 22.5% versus FY2024.

• Yuexiang Club revenue rose 11.6% and membership expanded 20% compared to FY2024.