Xiabuxiabu Catering Management (China) Holdings Co., Ltd. Issues 2025 Profit Alert: Significant Reduction in Net Loss Expected

Key Highlights for Investors

• Revenue Decline: The Group expects revenue of approximately RMB3.8 billion for the year ended 31 December 2025, representing a decrease of about 20% compared to 2024.
• Substantial Reduction in Net Loss: Despite the revenue drop, net loss is expected to narrow significantly to between RMB290 million and RMB310 million in 2025, down from a net loss of around RMB398 million in 2024. This equates to a year-over-year reduction in net loss of approximately 22.2% to 27.2%.
• Operational and Strategic Improvements Drive Results:
  • Systematic closure of underperforming restaurants and a 51.4% expected decrease in asset impairment provisions related to closed and continually loss-making locations.
  • Continued cost optimization driven by digitalized procurement, inventory management, and streamlined restaurant replenishment.
  • Enhanced centralized supply chain management to achieve integrated resource allocation across regions.
  • Strategic promotion of gift card sales, leading to a considerable increase in new membership conversions and higher member consumption rates.
• Forward-looking Initiatives:
  • Leveraging a wholly-owned meat processing subsidiary to solidify the integrated supply chain and support new brands such as “Xiabu Pasture” and “Xia Niu Pai”.
  • Deepening the “Phoenix Return” partnership mechanism to improve risk and benefit sharing, aiming to enhance restaurant operational performance.
  • Transitioning from a centralized to a regional management model for improved market responsiveness and operational efficiency.
  • Expanding the on-demand delivery service ecosystem to drive business quality and scale.
  • Implementing a dual operation model in the Coucou brand with both à la carte and buffet options to attract diverse customer segments and boost table turnover.

Details Investors Must Note

Price Sensitive Information: The narrowing of losses despite a significant revenue decline suggests that the Group’s cost control and strategic restructuring have begun to yield positive results. Reducing asset impairment provisions and improving operational efficiency are likely to be viewed positively by the market, as these measures indicate a path towards profitability and long-term sustainability.

Ongoing Risks: The catering industry continues to face headwinds from evolving consumer demand and broader market challenges. While the Group has taken proactive measures to adapt, the effectiveness of these strategies and the pace of industry recovery remain uncertain.

Uncertainty of Actual Results: The financial figures disclosed are based on unaudited management accounts and have not been reviewed by the Company’s auditors or Audit Committee. Final results may differ when audited and published.

Corporate Governance Update

The Board, as of the announcement date, comprises a mix of executive, non-executive, and independent non-executive Directors, led by Chairman Mr. HO Kuang-Chi, ensuring continued oversight as the Group navigates this transitional period.

Next Steps and Disclosure Timeline

The Company expects to publish its audited annual results for the year ended 31 December 2025 by the end of March 2026, fully complying with the Listing Rules disclosure requirements.

Investor Advisory

Shareholders and prospective investors are strongly advised to exercise caution when trading in the Company’s shares, as the final audited results may differ from the preliminary figures disclosed.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The information is based on preliminary unaudited accounts and may differ from the final audited results. Investors should exercise caution and consult professional advisers before making any investment decisions.

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