Zhou Liu Fu Jewellery (6168) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended June 30, 2025, rose 5.2% year-over-year to RMB3,150.4 million, driven by strong online sales growth and product mix optimization.

• Net profit increased 11.9% year-over-year to RMB415.3 million, with gross profit up 8.7% to RMB827.2 million and gross margin improving to 26.3%.

• Online sales surged 34% year-over-year, now contributing 52% of total revenue, while franchise revenue declined 17% and self-operated store revenue fell 15%.

• The company closed a net 272 stores, ending the period with 3,760 franchise and 97 self-operated stores, reflecting ongoing structural adjustments.

• The company completed a successful IPO and over-allotment, raising HK$1,429.48 million, with proceeds allocated for network expansion, brand building, product development, and working capital.

Financial highlights

• Gross profit margin improved to 26.3%, up about 1 percentage point year-over-year.

• Earnings per share increased to RMB1.09 from RMB1.01 in the prior year period.

• Cash and cash equivalents rose sharply to RMB1,588.3 million, mainly due to proceeds from the Global Offering.

• Gearing ratio decreased to 23.1% from 34.9% at year-end 2024.

• Interim dividend proposed: RMB0.45 per share, totaling approximately RMB198.3 million.

Outlook and guidance

• The company plans to invest in product R&D, expand its store network (targeting 200 self-operated stores in three years), and strengthen e-commerce operations.

• Strategic focus includes new media marketing to attract young consumers and further international expansion, especially in Southeast Asia.

• All net proceeds from the recent listing (HK$1,429.48 million) remain unutilized and are earmarked for network expansion, brand building, product development, and working capital by 2028.

• Plans to increase overseas presence to 10 stores by year-end and invest in premium flagship stores.