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After half a year of hard work, the “No. 1 Red Date Stock” Haositongni suffered even greater losses.

Recently, Haoshangni released its 2024 semi-annual report. During the reporting period, the company achieved revenue of 816 million yuan, a year-on-year increase of 16.44%; the net profit attributable to the parent was -36 million yuan, compared with -18 million yuan in the same period last year, and the loss expanded by about 99%.

The company attributed the increase in losses to the decrease in financial management income. In the first half of the year, the income generated by Haoshangni's financial management and fund investment decreased by about 24.86 million yuan year-on-year, and non-recurring gains and losses decreased significantly year-on-year, resulting in a decrease in net profit attributable to the parent company.

"How to turn losses around" has become a pressing problem for Haoshangni in its operations in the past two years. In 2022 and 2023, its net profit attributable to the parent company was -189 million yuan and -52 million yuan respectively, with a cumulative loss of about 277 million yuan in two and a half years.

After selling Be & Cheery, Haosini has never found a new profit growth point.

Sales expenses increased by 20%

More than 70% of Haoshangni’s revenue comes from its main business of red dates.

In the first half of the year, Haoshangni red date products contributed 598 million yuan in revenue, a year-on-year increase of 21.4%, accounting for 73.3% of the total revenue, an increase of about 3 percentage points from the previous period, and product concentration further improved; other products had revenue of 128 million yuan, a year-on-year increase of 19.5%, accounting for 15.63%; healthy and fresh-keeping products had revenue of 35 million yuan, a year-on-year decrease of 23.68%, accounting for 4.28%.

The financial report pointed out that Haoshangni established a product matrix of "red dates + healthy fresh-keeping foods" in the hope of leading the innovative upgrade of healthy food preservation methods from fresh and cold to fresh-keeping. However, judging from the revenue of healthy fresh-keeping products, the market does not seem to buy it.

In terms of sales, Haoshangni's overall production volume in the first half of the year increased by 96.36% year-on-year to 18,100 tons; sales volume was 18,800 tons, an increase of 55.69% year-on-year.

Behind the increase in sales and revenue is the increase in marketing investment by Haoshangni.

In the first half of the year, Haoxiangni's sales expenses were 186 million yuan, a year-on-year increase of 19.9%, even exceeding the 16.44% increase in revenue; the sales expenses of 186 million yuan accounted for 22.74% of the current revenue, and the proportion was also rising compared with the previous period. The company's gross profit margin in the first half of the year was 24.74%, and after deducting management expenses, the net profit margin was only -3.27%.

The largest share of sales expenses was business promotion expenses, which amounted to RMB 63.2716 million, RMB 12.239 million more than the previous period, mainly due to the increase in live broadcast promotion expenses. During the reporting period, Haoshangni's advertising expenses totaled RMB 9.4612 million, of which RMB 8.3405 million was spent on online advertising.

Chairman will make a profit of 50 million

As online marketing increases, the number of offline stores of Haoshangni is decreasing.

As of the end of June, Haoshangni had 390 stores, 14 fewer than the 404 stores at the beginning of the period, and 429 stores at the beginning of 2023. Among them, there were 155 directly-operated stores and 235 franchise stores in the first half of the year; there were 242 stores in Henan Province, its home base, and 148 stores outside the province.

An interesting phenomenon is that although several directly-operated stores of Haoshangni with high revenue have maintained store operations, their business areas have shrunk.

For example, the direct-operated store ranked first in terms of revenue is the Xinzheng Stadium Store, which opened in January 2021. The business area in the first half of 2023 was 260 square meters, and it was reduced to 200 square meters in the first half of 2024; the second is the Zhengzhou Huanghe Road Store, with the business area reduced from 261 square meters to 210 square meters; the third-ranked Pingdingshan Hongxiang Jinyuan Store opened in August last year and has no comparable data; the fourth-ranked Zhengzhou Greentown Plaza Store has reduced its business area from 100 square meters to 80 square meters; the fifth-ranked Zhengzhou Guoji Road Store has reduced its business area from 160 square meters to 90 square meters... The most direct benefit of reducing the business area is that it can reduce store rent expenses and secondly, it can reduce the number of employees as needed and reduce personnel expenses.

Perhaps due to the general reduction in business area, the average store floor space efficiency of Haoshangni's directly-operated stores in the first half of 2024 was 8,600 yuan/square meter, an increase from 7,400 yuan/square meter in the previous period.

As the third largest shareholder of Mingminghenmang, a leading company in the snack mass-market segment, the outside world is also curious about Haoshangni's achievements in the snack channel.

According to the disclosure of Haoshangni in April, it is expected to sell products and raw materials to its related party Snacks is Busy (now renamed "Mingming is Busy") in 2024, with the contract signing amount or estimated amount being approximately 181 million yuan. However, in the semi-annual report, it did not disclose the proportion of revenue from the snack channel, only stating that "the cumulative coverage of snack stores of various brands exceeds 20,000".

Despite its consecutive losses, Haosini insisted on distributing large dividends.

The announcement showed that as of the end of June, the undistributed profits at the end of the interim period of the consolidated financial statements of Haoshangni were 1.529 billion yuan. The company plans to pay a cash dividend of 4 yuan (including tax) per 10 shares to all shareholders, based on the total share capital of 453 million shares minus 16 million shares in the repurchase special account, totaling 438 million shares. The total amount of cash dividends will be approximately 175 million yuan.

The company's chairman Shi Jubin holds 129 million shares of Haoshangni, accounting for 28.53% of the shares. Roughly calculated, he will receive a dividend of 52 million yuan.

At the same time, despite the losses, Haoshangni will pay 1 yuan (tax included) and 6 yuan (tax included) per 10 shares to all shareholders in 2022 and 2023 respectively.