Helens International Holdings Company Limited: Net Profit Declines in 2024

Business Description

Helens International Holdings Company Limited is a leading bar operator and franchise business primarily in the People’s Republic of China (PRC) and Hong Kong. The company operates two main business segments: self-operated bars and franchise business. The company has a presence across 32 provincial-level administrative regions and 274 cities in China, with a total of 579 bars as of March 19, 2025. [[23-24]]

Financial Analysis

Income Statement

The company’s revenue decreased by 37.8% from RMB1,208.6 million in 2023 to RMB752.2 million in 2024, primarily due to a decline in the performance of self-operated bars as a result of changes in the external environment. [[9]]
The company’s net profit attributable to owners of the company declined from a profit of RMB180.5 million in 2023 to a loss of RMB78.0 million in 2024. This was mainly due to impairment losses on plant and equipment, right-of-use assets, and investment properties, as well as increased net impairment losses on trade receivables. 10 – 12

Balance Sheet

The company’s total assets decreased from RMB2,165.0 million as of December 31, 2023, to RMB1,376.0 million as of December 31, 2024, mainly due to the decline in cash and bank balances and property, plant, and equipment. [[16-17]]
The company’s total liabilities decreased from RMB343.6 million as of December 31, 2023, to RMB257.2 million as of December 31, 2024, primarily due to a reduction in lease liabilities. 17 – 18

Cash Flow Statement

The company’s cash and bank balance decreased from RMB1,278.9 million as of December 31, 2023, to RMB806.4 million as of December 31, 2024, mainly due to the payment of dividends in 2024. [[18]]

Dividend

The Board recommended the payment of a final dividend of RMB0.1146 per ordinary share for the year ended December 31, 2024, subject to shareholders’ approval at the upcoming Annual General Meeting. This represents a decrease from the previous year’s final dividend of RMB0.3153 per ordinary share. [[45]]

Key Findings

The company’s financial performance in 2024 was negatively impacted by the complex and volatile domestic economic market, leading to a decline in revenue and net profit. The company has taken various measures to improve its same-store performance, including optimizing the operation model, launching new products, and enhancing brand influence and customer experience. [[10-12]]
The company’s balance sheet remains strong, with a healthy cash position and reduced lease liabilities. However, the company has recognized significant impairment losses on its assets, which could be a concern for investors. 16 – 18

Recommendation

For investors currently holding the stock: Given the company’s net profit decline and the challenging market conditions, it may be prudent to hold the stock and monitor the company’s progress in implementing its turnaround strategies. Investors should closely follow the company’s future financial performance and management’s ability to navigate the ongoing market challenges.
For investors not currently holding the stock: Given the company’s recent financial performance and the potential risks, it may be advisable to wait for more signs of a sustainable recovery before considering an investment. Investors should closely monitor the company’s progress in the coming quarters and evaluate its ability to improve profitability and shareholder value.
Disclaimer: This recommendation is based on the information provided in the financial report and should not be considered as investment advice. Investors should conduct their own due diligence and consult with financial advisors before making any investment decisions.

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