A Shocking Turn for GUIFAXIANG: Profits Plummet Amidst Market Turbulence

In a startling revelation, GUIFAXIANG, a stalwart in the consumer staples sector, has reported a significant downturn in its financial performance for the first half of 2025. The company, known for its iconic “十八街麻花” and recognized as a “中华老字号” enterprise, has seen its net profit plunge into the red, marking a concerning trend for investors and stakeholders alike.

Financial Performance Overview

The company’s half-year report paints a grim picture, with total operating revenue standing at 2.49 billion CNY, a 7.03% decrease from the previous year. More alarmingly, the net profit attributable to shareholders turned negative, reaching -391.97 million CNY, a staggering 117.25% decline year-over-year. This downturn is further exacerbated in the second quarter, where net profit attributable to shareholders plummeted by 362.73% to -1.056 billion CNY.

Profitability and Expense Ratios

The financial strain is evident in the company’s profitability metrics. The gross profit margin has slightly decreased to 44.09%, while the net profit margin has nosedived to -1.57%. Operating expenses have surged, with the ratio of operating expenses to revenue climbing by 24.72% to 44.41%.

Revenue Composition and Regional Distribution

Despite the financial turmoil, “麻花” products remain the core of GUIFAXIANG’s business, accounting for 64.96% of the main business revenue. The Tianjin region continues to be the primary market, contributing 88.13% to the total revenue. However, the e-commerce channel has seen a revenue increase, indicating a shift in consumer purchasing behavior.

Market Reaction and Speculation

In a surprising turn of events, GUIFAXIANG’s stock price soared to a rare halt, with the market capitalization reaching 24.99 billion CNY. This unexpected surge, amidst the backdrop of financial distress, has sparked speculation and debate among investors. The company’s aggressive expansion and increased expenditure on marketing and operational costs have not translated into revenue growth, raising questions about the sustainability of its current strategy.

Looking Ahead

As GUIFAXIANG navigates through these turbulent times, the focus will be on its ability to adapt to changing consumer demands and market dynamics. The company’s historical resilience, with only two instances of mid-year losses in the past decade during the pandemic years, suggests a potential for recovery. However, the path forward requires strategic adjustments and a keen focus on profitability and efficiency.

In conclusion, GUIFAXIANG’s recent financial performance serves as a critical reminder of the volatile nature of the consumer staples sector. Investors and stakeholders will be watching closely as the company charts its course through these challenging times, hoping for a return to profitability and growth.