PAGODA GP (02411) announced its 2025 financial results on March 26. The company reported revenue of RMB 8.174 billion and a gross profit of RMB 597 million. The net loss attributable to shareholders was RMB 317 million, narrowing by 17.8% year-on-year, indicating an improvement in profitability. A notable performance was observed in the second half of the year, which recorded a gross profit of RMB 380 million, representing increases of 161.7% year-on-year and 77.1% sequentially. This improvement is attributed to the company's ongoing efforts to optimize its store network and enhance operational quality. Following nearly two years of proactive network optimization, the company has returned to a sustainable store expansion strategy, adding a net 82 stores in the second half, which significantly boosted profitability.

As of December 2025, the company's offline store network comprised 4,468 stores, including 4,460 franchised stores and 8 self-operated stores, spanning over 170 cities across 22 provinces and municipalities in China. PAGODA GP's revenue primarily comes from two sources: the C-end, mainly through offline franchised and self-operated stores, and the B-end, via a direct wholesale model to distributors. The revenue structure showed a trend towards diversification in 2025, with contributions from franchised stores, self-operated stores, regional agents, direct sales, and online channels at 72.3%, 0.3%, 10.5%, 14.6%, and 0.7%, respectively.

The dual-drive strategy of "C-end + B-end" highlights the company's operational resilience. On the C-end side, continuous optimization of store layouts and product innovation were key. In 2024, the company completed upgrades and renovations for all stores to standardize the brand and IP image. Store optimization continued into the first half of 2025, guiding franchisees to assess store openings for cost reduction and efficiency gains. This led to a significant improvement in store operational efficiency in the second half, with key performance indicators largely turning positive, marking the start of an expansion strategy. Specific measures included optimizing store layouts and focusing on products. For instance, over 50 themed stores were created around seasonal fruits, such as Spring Festival and Thai Fruit Festival themes. On the product side, the company promoted a combination of "high-traffic signature items" and "cost-effective seasonal products," along with marketing activities. The gift business was also upgraded across product, standard, and service dimensions, continuously enriching the product matrix. The gift business gained consumer favor, with its sales proportion rising to 14% in 2025.

Furthermore, the company established an Online-Merge-Offline (OMO) model, acquiring traffic from multiple channels and integrating fan economy into its operations. In 2025, orders from its own app, mini-programs, Meituan, and Ele.me accounted for approximately 26.6% of total orders, with Meituan alone contributing about 51.4%. The Douyin channel performed notably well, with total orders increasing by 21.6% and retail sales reaching RMB 107 million, a year-on-year growth of 30.9%. By the end of 2025, the cumulative number of members across all distribution channels exceeded 95.3 million, up 5.0% year-on-year. Visits to the WeChat mini-program reached 81.96 million, an increase of about 8.3%. The total number of store-specific WeChat groups grew to approximately 32,000, with a combined fan base of about 16.9 million. Sales generated through WeChat group bulk orders exceeded RMB 116 million, up approximately 14% year-on-year.

On the B-end side, the company expanded through omni-channels by innovating service models, such as in-store, home delivery, and gifting, to strengthen its core competitiveness in the B2B segment. It also fully opened its supply chain to continuously attract premium clients and consolidated its differentiated advantage in signature fruits through a category brand strategy. By deepening its industrial chain involvement—through empowerment via agricultural technology, information technology, and capital incubation—the company built an efficient and synergistic supply chain system. In 2025, its total B2B direct sales amounted to RMB 1.191 billion, remaining relatively stable and accounting for 10.32% of total sales (retail + direct sales), an increase of 1.33 percentage points year-on-year. Amid multi-channel expansion, domestic direct sales achieved counter-trend growth, accounting for 81.37% of total direct sales. Overseas direct sales, primarily supplying high-quality local products to supermarkets and wholesalers in regions like Hong Kong, Singapore, Indonesia, and Thailand, accounted for a smaller share of 18.63%.

Building a technological foundation is central to the company's long-term growth prospects. As China's largest fruit retailer, leading in sales for ten consecutive years, PAGODA GP has adhered to its core strategy of being an expert and leader in high-quality, cost-effective fruits during industry adjustment cycles. It has established three major business groups—retail, B2B, and category—implementing multi-dimensional measures to advance store optimization and efficiency. Concurrently, the company has embraced AI trends, upgrading its digital intelligence systems around core retail processes to create a robust technological base that empowers business growth and operational efficiency. It launched a new large language model for fruit knowledge, extended AI-powered smart ordering to 3,010 stores in 2025, and introduced an AI store operation diagnostic system that provides over 200,000 precise data diagnoses per year for stores.

In summary, PAGODA GP's dual-engine strategy of "B-end + C-end" is driving its progress. The C-end segment has transitioned from proactive contraction to an expansion cycle, showing a clear inflection point in the second half of 2025, supported by product and store innovations and the OMO model. The B-end segment demonstrates relative resilience through multi-channel expansion and supply chain control, with accelerated efforts in overseas markets. By establishing three major business groups and continually innovating, the company is refining its product and service structure for both B and C ends, promoting high-quality development. PAGODA GP has actively rewarded shareholders, maintaining annual dividend distributions even during industry adjustments, with a cumulative payout of RMB 235 million over the past four years since 2022. Currently in a strategic adjustment phase, the company is actively advancing strategic upgrades to fuel long-term growth. It is expected to gradually restore same-store sales growth and accelerate its store opening pace, with positive long-term growth prospects and potential for valuation reassessment.