Core Viewpoint - Helen's performance in 2024 is disappointing, with a significant revenue decline of nearly 40% year-on-year, marking the third consecutive year of revenue drop, and the company has shifted from profit to loss [1][2] Revenue and Profit Analysis - The company reported a revenue of 752 million yuan in 2024, down 37.8% from 1.209 billion yuan in 2023, with a loss of approximately 78 million yuan compared to a profit of 180 million yuan in the previous year [2][3] - Adjusted net profit decreased by 65.29% to 101 million yuan [2] Store Closure and Transformation Strategy - Since 2023, the company has closed over 500 direct-operated stores while launching a franchise model, opening over 400 "Hi Beer Partner" franchise stores [1][2] - As of March 19, 2025, the number of direct-operated stores decreased from 255 to 113, while franchise stores increased to 424 [2][3] Sales Performance - Franchise business revenue grew by 85.7% to 195 million yuan in 2024, but average daily sales per store declined significantly [3] - Average daily sales for direct-operated and franchise stores fell from 7,300 yuan in 2023 to 7,000 yuan in 2024, and for "Hi Beer Partner" stores, it dropped from 7,100 yuan to 5,000 yuan, a nearly 30% decline [3] Same-Store Sales Decline - Same-store sales decreased by 21.3% from 670 million yuan in 2023 to 528 million yuan in 2024, with average daily sales per store dropping from approximately 1.2 million yuan to 950,000 yuan [4] - The company attributes this decline to the complex and changing domestic economic market [4] Market Position and Consumer Trends - Helen's low-price strategy has not translated into improved same-store sales, raising questions about the sustainability of its business model [7][8] - The company faces increasing competition from alternative social venues, which may affect its appeal as a low-cost social space [8] Operational Challenges - The shift to a franchise model has reduced operational costs but has not proven to be a sustainable solution for profitability [7] - The company is exploring various measures to enhance store performance, including optimizing operations and improving customer experience [4][6]

Core Viewpoint - Helen's, known as "China's first small tavern stock," is facing significant challenges in 2024, including a drastic decline in direct sales, a drop in same-store sales exceeding 20%, and a shift from profit to loss, primarily due to consumer fatigue and a lengthy cultivation period in lower-tier markets [2][3][4]. Financial Performance - In 2024, Helen's total revenue plummeted by 37.8% to 752 million RMB from 1.209 billion RMB in 2023 [3][4]. - Direct sales revenue fell sharply by approximately 50%, from 1.103 billion RMB in 2023 to 558 million RMB in 2024 [4][5]. - The company reported a net loss of 77.976 million RMB in 2024, compared to a profit of 180 million RMB in 2023, marking a significant deterioration in financial health [5][8]. Business Segmentation - The direct sales segment's revenue decline was the primary contributor to the overall revenue drop, while the franchise business saw explosive growth, with revenue increasing by about 85% from 105 million RMB in 2023 to 195 million RMB in 2024 [4][5]. - The franchise business now accounts for 25.9% of total revenue, up from 8.7% in the previous year [4][5]. Store Performance - As of March 19, 2025, Helen's had a total of 579 stores across 274 cities in China, with a notable reduction in direct and franchise stores [6]. - Same-store sales dropped by 21.3% in 2024, with average daily sales per store decreasing by 21.5% [6][7]. Market Challenges - The overall consumption market in 2024 showed signs of weakness, with a 1.4% decline in alcohol consumption prices, impacting Helen's performance [8]. - The shift to lower-tier cities has proven challenging, as these markets generally have lower customer spending and brand recognition compared to first- and second-tier cities [11][12]. Strategic Initiatives - Helen's has attempted to pivot its strategy by expanding its franchise model and introducing community space concepts, but these efforts have not significantly improved profitability or same-store sales [12][16]. - The company aims to enhance its international brand presence through a secondary listing in Singapore, although the immediate impact on revenue growth remains limited [16]. Market Valuation - Helen's market capitalization has decreased by over 90% since its peak, with its stock price falling from over 30 billion HKD at IPO to approximately 2 billion HKD as of April 2025 [13][14]. - The company has been removed from the Hang Seng Composite Index and the Hong Kong Stock Connect list, leading to decreased trading activity and liquidity concerns [13][14].

Core Viewpoint - Helen's performance in 2024 showed a decline in revenue due to a weak consumer market, but the company successfully expanded its franchise business and maintained profitability through strategic adjustments [2][3]. Financial Performance - The company reported revenue of RMB 752 million in 2024, a decrease from RMB 1,209 million in 2023, primarily due to a decline in direct sales revenue as a result of market conditions [2]. - Despite the revenue drop, adjusted net profit for 2024 was RMB 100.6 million, indicating effective cost management and operational efficiency [3]. Business Strategy - Helen's franchise business, "Hi Beer Partner," saw significant growth, with revenue increasing by 85.7% from RMB 105 million in 2023 to RMB 195 million in 2024 [3]. - The company is focusing on platform-based development and expanding its bar network, increasing the total number of stores from 479 at the end of 2023 to 560 by the end of 2024 [3]. Profitability Metrics - The gross profit margin for the store level remained stable at 69%, with the proprietary beverage gross profit margin increasing from 75.7% in 2023 to 76.6% in 2024 [3]. - The proportion of high-margin beverage alcohol in proprietary beverage revenue rose from 79.8% in 2023 to 82.4% in 2024, reflecting consumer preference for new product offerings [3]. Future Outlook - The company plans to continue expanding its bar network through the "Hi Beer Partner" program and enhance supply chain management and environmental design capabilities [3].

Core Viewpoint - Helen's Group (海伦司) anticipates a significant decline in revenue and a net loss for the fiscal year 2024, primarily due to a weak consumer market and adjustments in its business strategy [1][2]. Revenue Summary - The company expects its revenue for the fiscal year ending December 31, 2024, to be between approximately RMB 730 million and RMB 780 million, compared to approximately RMB 1.21 billion in 2023, indicating a substantial decrease [1]. - The decline in revenue is attributed to a sluggish consumer market and the strategic shift towards platform transformation, which has led to a decrease in direct business income while franchise business income has increased [1]. Profit Summary - The adjusted net profit for 2024 is projected to be between approximately RMB 100 million and RMB 120 million, down from approximately RMB 291 million in 2023 [1]. - The company anticipates a net loss attributable to shareholders for 2024 in the range of approximately RMB 60 million to RMB 90 million, compared to a profit of approximately RMB 180.5 million in 2023 [2]. Asset Impairment and Losses - The expected net loss is primarily due to a decline in the fair value of office properties, resulting in an asset impairment loss estimated between RMB 50 million and RMB 70 million [2]. - Additional losses are anticipated from the optimization and adjustment of the tavern network, as well as operational performance declines, totaling between RMB 80 million and RMB 120 million [2]. - The company will incur listing expenses of approximately RMB 13.3 million related to its secondary listing in Singapore [2]. Financial Reporting Clarification - The board emphasizes that the term "adjusted net profit/(loss)" is not defined under Hong Kong Financial Reporting Standards and is calculated by adding back asset impairment losses and other non-operational expenses [3]. - Management believes that presenting this non-Hong Kong Financial Reporting Standards measure alongside the corresponding Hong Kong Financial Reporting Standards measure provides useful information for investors and management [3].