Core Viewpoint - Recent news regarding the restructuring of Gao Xin Retail's (HK06808) operations, particularly the adjustment of its Da Run Fa stores, has sparked significant discussion in the market. The company has clarified that it is not closing its Northeast region but rather reorganizing its operational zones to enhance efficiency and customer service [1][2]. Financial Performance - Gao Xin Retail reported a revenue of RMB 71.55 billion and a net profit of RMB 386 million for the fiscal year ending March 31, 2025, marking a turnaround from previous losses [3][4]. - The company achieved a gross profit of RMB 17.24 billion, although this represented a 4% decrease compared to the previous year [4]. - The total assets decreased by 7.8% to RMB 55.97 billion, while total liabilities fell by 8.7% to RMB 35.55 billion [4]. Strategic Changes - The company has transitioned ownership from Alibaba to DeHeng Capital, which has led to a renewed focus on a "low-price" strategy and a commitment to restructuring its market approach [5][6]. - Gao Xin Retail aims to enhance its competitive edge by emphasizing price competitiveness and customer experience through its "everyday low price + community life center" model [8][14]. Operational Adjustments - The restructuring of operational zones from five to four is intended to streamline management and improve service delivery [1][10]. - The company has closed a total of 9 stores, including 8 large hypermarkets and 1 medium-sized supermarket, as part of its cost-cutting measures [10]. Market Position and Competition - Gao Xin Retail continues to face intense competition, particularly in non-first-tier cities, where new entrants like Sam's Club and ALDI are expanding their presence [15][16]. - The company has acknowledged the need to attract more customers to its stores, emphasizing the importance of foot traffic for its growth [14]. Future Outlook - The company plans to focus on various aspects such as product offerings, pricing strategies, operational efficiency, store planning, talent development, and membership operations to strengthen its market position [14].

Core Viewpoint - Gao Xin Retail is undergoing significant strategic adjustments following Alibaba's exit and a major management overhaul, focusing on operational efficiency and shifting its business model towards medium-sized supermarkets amidst a challenging retail environment [2][3][4]. Group 1: Strategic Adjustments - Gao Xin Retail has restructured its operational regions from five to four, integrating the Huazhong region into other areas to enhance efficiency and customer service [4]. - The company has experienced a leadership change, with Alibaba officially exiting and Dehong Capital taking control, leading to a reshuffle in the board of directors [4][5]. - The CEO, Shen Hui, remains in position, having been with the company since 1999 and previously managing the Auchan brand in China [5]. Group 2: Financial Performance - In the fiscal year 2024, Gao Xin Retail reported a revenue decline of 13.3% to 72.567 billion yuan, with a net loss of 1.605 billion yuan, compared to a profit of 109 million yuan in the previous year [6]. - The company has implemented a "store closure" strategy, closing 20 hypermarkets in fiscal year 2024, with a net reduction of 14 stores, and further reducing the number by 7 in fiscal year 2025 [6][7]. - Despite revenue decreases, Gao Xin Retail achieved profitability in fiscal year 2025, reporting a net profit of 405 million yuan, although total revenue fell to 71.552 billion yuan [7]. Group 3: Industry Trends - The traditional supermarket sector is facing significant challenges, prompting companies like Gao Xin Retail to explore new business models, including membership and discount stores [8][9]. - The shift towards medium-sized supermarkets is seen as a necessary adjustment, as the retail market structure in China evolves, with larger hypermarkets becoming less relevant [9]. - Gao Xin Retail is focusing on expanding its medium-sized supermarket format, which has shown growth, with 33 stores and an average area of 7,084 square meters per store [8][9].

Core Viewpoint - The company reported better-than-expected financial performance for FY2025, with a revenue of 71.55 billion, a slight decline of 1.4%, but a 1.6% increase when excluding the impact of supply chain business contraction and store closures [1] Financial Performance - Revenue for FY2025 was 71.55 billion, down 1.4%, but up 1.6% when excluding supply chain impacts [1] - Operating profit reached 1.425 billion, compared to a net loss of 1.009 billion in the previous year [1] - Net profit was 0.405 billion, recovering from a net loss of 1.605 billion last year, exceeding expectations due to ongoing store optimization and significant cost reduction efforts [1] - The interim dividend announced was 0.17 HKD per share, yielding approximately 17.5% based on the closing price, surpassing market expectations [1] Development Trends - Same-store sales improved by 0.6%, driven by enhanced price competitiveness and stable growth in customer spending across channels [1] - Online B2C revenue increased by 6%, contributing to higher average transaction values [1] - Membership fee revenue surged by 125% to 0.36 billion, indicating strong growth in membership-related income [1] - The company closed 7 hypermarket stores, reducing the total to 465, while increasing the number of convenience stores by 1 to 33, with same-store sales growth of 5.9% [1] Cost Management and Profitability - Gross margin slightly decreased by 0.6 percentage points to 24.1%, with product gross margin also down by 0.6 percentage points to 20.7% [2] - The company focused on cost reduction through optimizing personnel costs, reducing headquarters expenses, and lowering rental costs, leading to a decrease in selling and administrative expense ratios [2] - Net profit margin improved by 2.8 percentage points to 0.6% due to these cost management efforts [2] Strategic Focus - The company is advancing a low-price, high-quality strategy, enhancing operational efficiency and competitiveness through better pricing strategies and product quality [2] - Efforts are being made to improve supply chain efficiency and digitalization to enhance overall operational effectiveness [2] Earnings Forecast and Valuation - The earnings forecast for FY2026 was raised from 0.38 billion to 0.67 billion, with a new forecast for FY2027 at 0.94 billion [2] - The current stock price corresponds to a price-to-earnings ratio of 29/21 for FY2026/FY2027, with a target price increase of 22% to 2.8 HKD, indicating a potential upside of 27% [2]

Core Viewpoint - High-end retail company Gao Xin Retail reported a revenue of 71.55 billion (down 1.4% year-on-year) and a net profit of 410 million, marking a turnaround from a loss of 1.605 billion in the same period last year, aligning with expectations [1] Group 1: Financial Performance - Revenue for FY25 was 71.55 billion, a decrease of 1.4% year-on-year, primarily due to a contraction in supply chain business and closure of underperforming stores [1] - The company declared a total dividend of 0.34 HKD per share, resulting in a dividend yield of approximately 16.6% [1] - Gross margin slightly declined by 0.6 percentage points to 24.1%, attributed to enhanced cost-effective strategies [2] Group 2: Operational Adjustments - The company implemented refined management strategies under new leadership, focusing on detailed adjustments in frontline stores and more efficient cost control, leading to a return to profitability [1] - Same-store sales saw a slight increase of 0.6%, driven by higher average transaction values due to a focus on high-cost performance products and improved quality control [1] - Membership fees generated revenue of 40 million, reflecting a year-on-year increase of 125% [1] Group 3: Future Outlook - The company plans to continue its "one store, one policy" transformation strategy, aiming for steady improvement in profitability through refined operations [1] - The operational focus will be on enhancing efficiency, reducing costs, and expanding new revenue sources, particularly through the development of membership stores [2] - The forecast for net profit for FY26 and FY27 is set at 500 million and 660 million respectively, with an introduction of an 850 million forecast for FY28 [2] Group 4: Valuation and Market Position - The average PE ratio for comparable companies in FY25 is 43x, down from 74x, primarily due to a valuation adjustment for Yonghui Supermarket [3] - The target price for FY26 has been adjusted down by 9.6% to 2.35 HKD, maintaining a "buy" rating [3]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 2.35 [8][9]. Core Insights - The company reported a significant improvement in profitability for FY25, achieving a revenue of HKD 71.55 billion (down 1.4% year-on-year) and a net profit of HKD 405 million, reversing a loss of HKD 1.605 billion in the previous year [1][2]. - The new management has focused on fine-tuning operations at frontline stores and implementing more efficient cost control measures, leading to a return to profitability [1][3]. - The company plans to continue its strategy of tailored store operations and aims for steady improvement in profitability through enhanced operational efficiency [4]. Revenue and Profitability - The company's merchandise sales revenue was HKD 68.48 billion, also down 1.4% year-on-year, primarily due to a contraction in supply chain operations and the closure of underperforming stores. However, the average transaction value increased, resulting in a same-store sales growth of 0.6% [2]. - Rental income decreased slightly to HKD 3.03 billion, down 2.8% year-on-year, attributed to store closures and tenant restructuring, with an overall vacancy rate of approximately 4.7% [2]. - Membership fees generated revenue of HKD 40 million, reflecting a substantial year-on-year growth of 125% [2]. Cost Control and Margins - The gross margin slightly declined by 0.6 percentage points to 24.1%, driven by a focus on high-value products. However, cost control measures were effective, with total expenses (excluding impairment impacts) decreasing by HKD 2.2 billion [3]. - The net profit margin improved by 2.8 percentage points to 0.6%, with adjusted profits reaching HKD 690 million, corresponding to a profit margin of 1.0% [3]. Future Outlook - The company’s operational strategy will focus on three main areas: enhancing efficiency through a "daily low price + community life center" model, continuing cost-saving measures, and expanding revenue sources through improved store formats and membership offerings [4]. - The company expects to see same-store sales growth of 8% in medium-sized supermarkets, with positive cash flow anticipated as the business model stabilizes [4]. Earnings Forecast and Valuation - The report maintains net profit forecasts of HKD 500 million for FY26 and HKD 660 million for FY27, with an introduction of an FY28 forecast of HKD 850 million [5]. - The average PE ratio for comparable companies is projected at 43x for FY25, leading to a target price adjustment of 9.6% to HKD 2.35, while maintaining the "Buy" rating [5].

Core Viewpoint - Gao Xin Retail, the parent company of RT-Mart, reported a revenue of 71.552 billion RMB for the fiscal year ending March 31, 2025, reflecting a year-on-year decrease of 1.4%, while achieving a net profit of 386 million RMB, marking a turnaround from a loss in the previous fiscal year [1][2]. Financial Performance - Revenue for the period was 71.552 billion RMB, down from 72.567 billion RMB, a decline of 1.4% [2]. - Gross profit decreased to 17.236 billion RMB, a drop of 4.0% from 17.958 billion RMB [2]. - Operating expenses were reduced to 15.232 billion RMB, down 16.2% from 18.178 billion RMB in the previous fiscal year [3]. - Net profit reached 386 million RMB, compared to a loss of 1.668 billion RMB in the prior year [2][3]. Store Operations - The total number of stores reached 505, covering 207 cities, with a reduction of 7 hypermarkets, bringing the total to 465 [3]. - The mid-sized supermarket format, RT-Mart Super, opened 4 new stores, increasing its total to 33, with same-store sales growth of 5.9% [3]. Strategic Developments - The decline in revenue was attributed to the closure of long-term loss-making stores and a contraction in supply chain businesses such as Tao Cai Cai and Tmall shared inventory [2]. - The company plans to promote the steady development and profitability improvement of various types of stores in the new fiscal year [3]. - Alibaba sold a 78.7% stake in Gao Xin Retail at a price of 1.38 HKD per share in January, exiting the company [3].

在行政费用方面，高鑫零售同样实现了有效控制。截至2025年3月31日的年度，行政费用为17.09亿元，与上年同期的22.51亿元相比，减少了5.42亿元，减幅 高达24.1%。这一减少主要归因于商誉减值的减少以及管理层对总部组织的优化，使得人事开支大幅缩减。 近日，大润发母公司高鑫零售（股票代码：06808）对外公布了其截至2025年3月31日的年度财务报告。报告显示，该公司在过去一年中的营业收入为715.52 亿元，与前一年度的725.67亿元相比，出现了1.4%的小幅下滑。 在利润方面，高鑫零售的毛利为172.36亿元，与上一年度的179.58亿元相比，下降了4%，毛利率也由上年的24.7%下滑至24.1%。尽管面临挑战，但公司通过 一系列的成本控制措施，在销售及营销开支上取得了显著成效。数据显示，销售及营销开支从上年的181.78亿元减少至152.32亿元，降幅达到了16.2%。 | | | 截至三月三十 | 日 T | | --- | --- | --- | --- | | | | 零二五年 | | | | 例註 | 人民幣自萬元 | 人氏 | | 收入 | 4 | 71,552 | | | 成本 | ...

Core Viewpoint - Gao Xin Retail's financial performance for the fiscal year ending March 31, 2025, shows a slight revenue decline but a return to profitability, marking a significant turnaround under new management from Dehong Capital [1][2]. Financial Performance - Gao Xin Retail reported revenue of 71.552 billion yuan, a slight year-on-year decrease [1]. - The net profit reached 386 million yuan, indicating a return to profitability compared to the previous year [1]. - Same-store sales increased by 0.6% year-on-year, driven by improved price competitiveness and a steady rise in customer spending [2]. Online and Membership Growth - Online sales revenue grew by 6% year-on-year, supported by the performance of the proprietary app "Dai Run Fa You Xian" and the introduction of new instant retail channels [2]. - Membership fee income reached 36 million yuan, an increase of 20 million yuan year-on-year, reflecting the expansion of membership stores and growth in member numbers [3]. Cost Control and Efficiency - Gao Xin Retail implemented various cost control measures, resulting in a significant improvement in expense ratios and overall operational efficiency [3]. - The company focused on reducing costs while enhancing sales revenue, which helped alleviate pressure from narrowing gross margins [3]. Store Development Strategy - The new management emphasized the importance of customer traffic for future growth, planning to enhance the customer experience through a "daily low price + community life center" model [4]. - As of the end of the reporting period, Gao Xin Retail operated 505 stores across 207 cities, with the "Dai Run Fa Super" format showing strong performance and plans for further expansion [4][5]. Market Trends and Future Directions - The retail industry in China is experiencing structural changes, with a focus on meeting the needs of diverse consumer groups through quality and cost-effective products [2][5]. - The company aims to balance modern technology and digital tools to optimize costs, efficiency, and service in its operations [4].

Core Insights - Gao Xin Retail, the parent company of RT-Mart, reported a revenue of 71.552 billion yuan for the fiscal year ending March 31, 2025, achieving a net profit of 386 million yuan, marking a turnaround from loss to profit compared to the previous fiscal year [1] - The company experienced continuous same-store sales growth, increasing from 0.3% in the first half of the fiscal year to 0.6% for the entire year [1] - The online B2C business showed strong performance, with the self-owned app "RT-Mart Fresh" gaining a larger share and the addition of instant retail channels, leading to a 6% increase in online revenue [1] - The total number of stores reached 505, covering 207 cities [1]

Financial Performance - Revenue for the fiscal year ended March 31, 2025, was RMB 71,552 million, a decrease of RMB 1,015 million or 1.4% compared to RMB 72,567 million in 2024[2] - Gross profit decreased by RMB 722 million or 4.0%, from RMB 17,958 million in 2024 to RMB 17,236 million in 2025[2] - Operating profit turned positive at RMB 1,425 million, compared to an operating loss of RMB 1,009 million in the previous year[2] - Net profit for the year was RMB 386 million, a significant turnaround from a net loss of RMB 1,668 million in 2024[2] - Basic and diluted earnings per share for 2025 were RMB 0.04, compared to a loss of RMB 0.17 per share in 2024[2] - The net profit margin for the fiscal year ending March 31, 2025, was 0.5%, an increase of 2.8 percentage points from a net loss margin of 2.3% in the previous year[68] Assets and Liabilities - Total assets decreased by RMB 4,742 million or 7.8%, from RMB 60,715 million in 2024 to RMB 55,973 million in 2025[2] - Total liabilities decreased by RMB 3,376 million or 8.7%, from RMB 38,921 million in 2024 to RMB 35,545 million in 2025[2] - Net cash decreased by RMB 3,975 million or 24.1%, from RMB 16,504 million in 2024 to RMB 12,529 million in 2025[2] Revenue Breakdown - Revenue from customer contracts recognized at a point in time was RMB 68,482 million, down from RMB 69,431 million in the previous year[12] - Rental income from tenants decreased to RMB 3,034 million from RMB 3,120 million[12] - Membership fee revenue increased to RMB 0.36 billion, a growth of 125.0% from RMB 0.16 billion, attributed to the expansion of membership stores and an increase in membership numbers[58] Expenses - The company reported a significant reduction in selling and marketing expenses, which fell from RMB 18,178 million in 2024 to RMB 15,232 million in 2025[4] - Employee benefits expenses amounted to RMB 8,306 million, a reduction of 13.1% from RMB 9,558 million in the previous year[17] - Administrative expenses were RMB 1.709 billion, a decrease of 24.1% from RMB 2.251 billion, with the expense ratio dropping to 2.4% from 3.1%[64] Taxation - The total income tax expense for the fiscal year ending March 31, 2025, was RMB 644 million, significantly higher than RMB 234 million in the previous year[26] - Approximately 44% of the company's Chinese subsidiaries benefited from preferential tax rates for small and micro enterprises for the fiscal year ending March 31, 2025, compared to 41% in the previous year[27] Cash Flow - The net cash inflow from operating activities for the fiscal year ending March 31, 2025, was RMB 3.549 billion, a significant increase of 283.3% from RMB 926 million in the previous year[71] - The cash outflow from investing activities for the fiscal year ending March 31, 2025, was RMB 4.913 billion, an increase of RMB 4.861 billion from RMB 52 million in the previous year[73] - The cash outflow from financing activities for the fiscal year ending March 31, 2025, was RMB 3.750 billion, an increase of 176.1% from RMB 1.358 billion in the previous year[74] Dividends - The company declared a final dividend of HKD 0.170 per share (equivalent to RMB 0.156) for the year ended March 31, 2025, compared to HKD 0.020 per share (equivalent to RMB 0.018) for the year ended March 31, 2024[36] - The company paid a total of RMB 1.70 billion in dividends to its owners for the year ended March 31, 2025, compared to RMB 401 million for the year ended March 31, 2024[38] Operational Strategy - The company plans to continue focusing on cost management and operational efficiency to improve profitability in the upcoming fiscal year[2] - The group aims to enhance customer experience through a "Everyday Low Price + Community Life Center" model, focusing on product quality, operational efficiency, and employee satisfaction[87] - The group is actively expanding its store network, having secured three new locations for hypermarkets through lease agreements or land acquisitions[84] Market Position - The company has a diversified customer base with no single customer accounting for more than 10% of total revenue[12] - The group operates primarily in offline physical stores and online sales channels within China, indicating a focused market strategy[11] Compliance and Reporting - The company has not applied any new accounting standards that have not yet come into effect during the reporting period[10] - The group’s financial statements are prepared in accordance with the Hong Kong Financial Reporting Standards, ensuring compliance with local regulations[9] - The company’s auditors have reviewed the consolidated financial statements for the year ending March 31, 2025[94]