Shenzhen Pagoda Industrial (Group) Corporation Limited (Pagoda GP, 02411) reported a return to profitability for the six months ended 30 June 2026, underpinned by stronger sales, an expanded store network and a higher-margin channel mix.

Financial Performance • Revenue rose 14.5% year on year to RMB 5.01 billion, supported by robust product sales (RMB 4.91 billion, 98.1% of total). • Gross profit surged 182.5% to RMB 608.86 million, lifting gross margin to 12.2% from 4.9% a year earlier, reflecting an improved product mix and contribution from new channels. • Profit before tax reached RMB 33.72 million versus a RMB 352.97 million loss in 1H25; net profit attributable to shareholders was RMB 33.56 million (1H25: RMB 342.05 million loss). • Adjusted net profit, excluding share-based payments and one-offs, stood at RMB 60.57 million, translating to an adjusted net margin of 1.2%. • Operating cash inflow totalled RMB 126.10 million (1H25: RMB 123.30 million outflow). Cash and bank balances increased to RMB 3.63 billion, while short-term bank borrowings rose to RMB 3.14 billion.

Channel Dynamics • Franchised fruit stores generated RMB 3.08 billion, or 62.7% of product revenue; daily sales per store improved 1.4%. • Direct sales maintained at RMB 700.93 million, with overseas 2B revenues up 36.3% to RMB 154.50 million. • Newly launched “Seven Star Alliance” brand partner stores contributed RMB 721.29 million, accounting for 14.7% of product sales in their first half-year of operation. • Online orders represented 27.8% of total transactions, led by Meituan at 47.4% of digital volume.

Network Expansion • Total outlets climbed to 6,709, including 4,758 fruit retail stores (up 8.5% year on year) and 1,951 brand partner stores under the “fruit + snack” model. • Franchised fruit stores form 99.9% of the fruit retail estate, with renewed growth driven by a delegated-operation franchise model lowering entry barriers.

Operational Metrics • Membership base expanded 5.0% to 97.70 million. • Store WeChat communities grew 22% to roughly 36,000, supporting RMB 87.60 million in community-group sales (up 51.1%). • Shenzhen Banguo procurement platform GMV advanced 21.9% to RMB 1.40 billion. • Inventory turnover days improved to 11.2 from 12.3; trade receivable days narrowed to 29.1.

Cost & Efficiency Actions • Selling expenses rose 11.4% to RMB 286.49 million, reflecting higher staffing and lease costs linked to the alliance stores. • Administrative expenses edged up 4.4% to RMB 225.70 million. • Impairment provisions on financial assets fell sharply to RMB 6.44 million versus RMB 39.92 million, following tighter collection efforts. • Research & development spend declined 16.9% to RMB 38.64 million amid headcount optimisation.

Capital Management • Capex reached RMB 170.10 million, mainly for increasing stakes in Nanjing Jinse Zhuangyuan and acquiring non-controlling interests in Shenzhen Banguo. • Net assets stood at RMB 2.66 billion; current ratio improved to 1.26. • Interim dividend: none declared. • The company repurchased 20.38 million H shares for HKD 35.98 million during the period, held as treasury stock.

Strategic Priorities Pagoda GP reiterated commitment to its positioning as “Expert and Leader in High-quality and Cost-effective Fruit Industry.” Management will accelerate store growth, deepen the Seven Star Alliance roll-out, enhance membership monetisation, and expand 2B export channels. Continued investments in digitalisation and AI are expected to drive further cost efficiencies across the supply chain and retail operations.