Kidswant is racing towards a revenue of 10 billion

Author | Wang Xiaojun

Editor | Huang Yu

On one side is a dazzling forecast of a 50%-100% surge in profits over six months, while on the other side is the harsh reality of declining sales efficiency (revenue/store area, measuring single-store efficiency). The maternal and infant giant Kidswant is still oscillating between expansion and profit growth.

Recently, Kidswant released its performance forecast for the first half of 2025, expecting to achieve a net profit attributable to the parent company of 120-160 million yuan, a year-on-year increase of 50%-100%. This follows a significant 72.44% increase in net profit in 2024, marking another high-growth report from Kidswant.

However, behind the impressive data, the company's operating costs exceed half of total revenue, and its heavy reliance on subsidiaries reflects the numerous challenges this maternal and infant giant faces on its rapid growth path.

Nevertheless, Kidswant is also expanding its diversified business through acquisitions and actively embracing AI technology, live streaming, and other channels, aiming to quickly enter the era of 10 billion yuan in revenue.

Earn More, Spend More

According to Kidswant's own introduction, Kidswant mainly engages in the retail of maternal and infant products and value-added services, positioning itself as a data-driven, customer relationship-based innovative all-channel service provider for parent-child families.

The company claims that since its establishment, it has focused on providing one-stop shopping and comprehensive growth services for infants and children aged 0-14 and pregnant women, creating a single-customer operating model centered on membership relationships through "technological power + humanized services."

Kidswant was listed on the Sci-Tech Innovation Board in October 2021. However, in the three years following its listing, its performance declined continuously until 2024, when it showed signs of improvement with a significant increase.

If we look solely at the growth rate, Kidswant undoubtedly delivered a very good report card in the first half of the year.

According to recent forecasts, in the first half of 2025, it is expected to achieve a net profit attributable to shareholders of the listed company of 120 million to 160 million yuan, a year-on-year increase of 50% to 100%; the net profit after deducting non-recurring gains and losses is expected to be 6.0728 million to 12 million yuan, a year-on-year increase of 60% to 100%.

This is another high-speed growth report following the full year of 2024 and the first quarter of 2025.

In 2024 and the first quarter of 2025, Kidswant achieved operating revenues of 9.337 billion yuan and 2.403 billion yuan, with year-on-year increases of 6.68% and 9.53%; net profits of 181 million yuan and 31.081 million yuan, with year-on-year increases of 72.44% and 165.96%; and net profits after deducting non-recurring gains and losses of 120 million yuan and 16.8227 million yuan, with year-on-year increases of 91.6% and 486.59%.

Combining the above data, it can be roughly calculated that in the recently concluded second quarter of 2025, Kidswant's net profit was between 88.6312 million and 129 million yuan, a year-on-year increase of 30.15% to 88.7%; the net profit after deducting non-recurring gains and losses was between 79.2501 million and 103 million yuan, a year-on-year increase of 38.6% to 80.6% From the performance growth rate in the first half of this year and 2024, Kidswant has gradually emerged from the decline in net profit attributable to the parent company for three consecutive years from 2021 to 2023, and has begun to re-enter a high growth phase.

However, the high growth rate of profits is not unrelated to the base, reflected in revenue and expenses, Kidswant can be said to earn a lot but also spend a lot.

According to the 2024 financial report, Kidswant's operating cost reached 6.56 billion yuan, accounting for over 70% of the total revenue of 9.34 billion yuan. Among them, the cost of sales and logistics for the main business of maternal and infant products totaled 6.423 billion yuan, accounting for 97.9% of total costs.

This high cost structure directly suppresses the company's profitability. While sprinting towards 10 billion yuan in revenue, a net profit of 180 million yuan seems particularly thin, with a net profit margin of only 2.20%. In the first quarter of 2025, the situation of 2.4 billion yuan in revenue with only 31 million yuan in net profit continues. Although there was a growth in net profit in the second quarter, it is still hard to say whether the high cost situation has improved.

The high costs of Kidswant are mainly due to its continued adherence to an expansion strategy. In 2023, Kidswant proposed a "three expansions" strategy: expanding categories, expanding tracks, and expanding formats.

The biggest move was the "big-ticket" acquisition of Leyou International. The total expenditure for the two acquisitions exceeded 1.6 billion yuan. More notably, when acquiring the remaining 35% equity, the company even adopted a "loan acquisition" method, indicating significant financial pressure.

However, Leyou International has also contributed significantly to Kidswant's current performance.

In 2024, out of Kidswant's total net profit of 180 million yuan, Leyou International contributed 105 million yuan. By the end of 2024, the total number of stores for Kidswant and Leyou International reached 1,046, with Kidswant's directly operated stores being 506 and Leyou International's stores being 540.

It is worth mentioning that despite increasing channels and expanding the market, Kidswant's sales per square meter has decreased. In 2024, Kidswant's sales per square meter fell by 3.17% year-on-year to 5,533 yuan/square meter, and the average store revenue shrank by 4.31% to 12.48 million yuan, with the sales per square meter indicator showing a deteriorating trend for three consecutive years.

According to Kidswant's plan, it will further expand its stores in the future.

Online and AI may become new growth stories?

In recent years, the maternal and infant industry has faced a complex and changing external environment.

The continuous decline in the birth rate of newborns has brought overall growth pressure to the industry. According to data from Analysys, although the transaction scale of China's maternal and infant industry is expected to reach 4.13 trillion yuan in 2024, a year-on-year increase of 7.4%, the gradual decline of the demographic dividend is an undeniable fact, and industry enterprises need to plan more growth paths.

Feeling the growth pressure in its track, Kidswant has begun to boldly reach beyond the maternal and infant track.

In early June, Kidswant announced that the company intends to acquire 65% of the equity of Jiangsu Xingsiyu Investment Management Co., Ltd. (hereinafter referred to as Jiangsu Xingsiyu) held by related party Wuxing Holdings, while cash acquiring 100% of the equity of Zhuhai Siyu Industrial Development Co., Ltd. (hereinafter referred to as Siyu Industrial) through Jiangsu Xingsiyu, with a transaction price of 1.65 billion yuan Kidswant stated that after the acquisition is completed, Siyu Industrial and the company will fully leverage synergies in member operations, market layout, channel sharing, industrial collaboration, and business expansion, further strengthening the company's leading advantage in the local life and new family services sectors, which will promote the company's high-quality sustainable development.

However, whether it can achieve more growth through acquisitions once again is still difficult to predict. Nevertheless, the financial pressure brought about by frequent mergers and acquisitions cannot be ignored by Kidswant.

In addition to entering more fields, Kidswant also plans to achieve performance growth through increased investment in the AI sector and the expansion of online channels.

In terms of AI, Kidswant not only views AI as a tool to enhance internal operational efficiency and optimize user experience but also sees it as a core driving force for incubating new products and expanding into new tracks.

In March of this year, Kidswant's wholly-owned subsidiary "Zhishuo Future" announced a partnership with Volcano Engine, a subsidiary of ByteDance, to jointly establish the "BYKIDs AI Smart Hardware Incubator." The collaboration aims to leverage each other's strengths to jointly incubate AI smart hardware, IP, and related enterprises targeting mothers, infants, and new families.

This move by Kidswant also aligns with professionals' judgments on industry trends.

Analysts from Cinda Securities expressed optimism about companies in the mother-infant-child sector, which possess long-term growth potential and may lead the industry's digital transformation. The mother-infant-child industry has shifted from the early "demographic dividend" to the "efficiency dividend" era, where market demand for product research and development, omnichannel integration, and digital supply chain capabilities have become core competitive advantages. Leading companies are expected to break through in stock competition through technology-driven, ecological collaboration, and the expansion of new consumption directions.

Kidswant stated that by 2025, it will create a multi-format model of "large stores + small stores + franchises + live streaming + social."

In terms of live streaming, Kidswant has jointly established "Chain Qi Future" with Xin Xuan Holdings, betting on the live streaming e-commerce track. In March, the Hangzhou Chain Qi Future live streaming room began regular operations, planning to create a matrix of thousands of influencers in the mother-infant sector. However, industry insiders have observed that Kidswant's sales performance in Xin Ba's live streaming room "seems less than satisfactory," and the effectiveness of the live streaming transformation remains to be verified.

Currently, Kidswant's future path is clear: on one hand, it explores new territories through the franchise model and AI, while on the other hand, it rapidly expands its territory through mergers and acquisitions. However, balancing financial and funding pressures during expansion is also an important issue for it at present.

On the road to achieving annual revenue of 10 billion, Kidswant still needs to continuously iterate