"HUNGFOOKTONG" half-year loss expands to HKD 10.909 million, Hong Kong retail business impacted by consumption from the mainland

HUNGFOOKTONG (01446.HK) announced its interim results for the period ending June this year, with revenue of HKD 292 million, a year-on-year decrease of 5.1%. Gross profit fell by 2.4% to HKD 177 million. The gross profit margin increased by 1.7 percentage points to 60.6%. Losses widened to HKD 10.909 million, compared to a loss of HKD 7.925 million in the same period last year; the loss per share was 1.66 cents. No dividend was declared.

The company explained that the increase in losses was mainly due to a one-time expense of approximately HKD 2.1 million related to additional sewage fees from previous years, which was recognized in the first half of this year.

The group stated that the retail business in Hong Kong remains the largest source of revenue for the group, recording revenue of HKD 226.5 million in the first half, a year-on-year decrease of 4.2%, accounting for 77.5% of the group's total revenue. During the review period, the flow of customers and same-store sales were impacted by Hong Kong citizens traveling north for consumption and overseas trips, with the impact being particularly severe during weekends and long holidays when many citizens traveled north for shopping.

Despite facing challenges, the group is still making every effort to stabilize overall sales performance. Among them, prepaid vouchers were particularly popular, highlighting customer loyalty to the group and reflecting recognition of the group's quality products. Due to the increase in gross profit margin and a decrease in administrative expenses, segment profit increased by 8% to HKD 5.8 million.

In response to the current business environment, the group is taking a cautious approach to opening new stores. As of the end of June, the group operated 98 HUNGFOOKTONG branches and 9 HFT Life cafe concept stores in Hong Kong, totaling 107 self-operated stores. Therefore, in terms of retail network size, the group remains the largest retailer of herbal products in Hong Kong