Huitongda Network (09878) 2025 Interim Results - Significant increase in profitability and cash flow, best in history in multiple indicators, AI-driven high-quality growth, and strategic transformation showing results

The Zhitong Finance App learned that on August 28, Huitongda Network Co., Ltd. (09878, hereinafter referred to as “Huitongda” or the “Group”) announced the interim results for the six months ended June 30, 2025. In the first half of 2025, the Group firmly promoted the two-wheel drive strategy of “improving quality and efficiency, innovation and development”, continuously optimizing the business structure, strengthening technological empowerment, keeping abreast of new consumer trends, continuing to innovate business models, building new growth gears, and achieving significant increases in profitability. Gross profit margin, net interest rate, and net interest rate to the mother all reached the best level in history, and AI-related revenue achieved significant breakthroughs, marking that the Group has moved from pursuing scale expansion to a healthy and sustainable development path that focuses more on improving development quality and profitability.

1. Overall improvement in profit quality and healthy cash flow growth

In the first half of 2025, the Group achieved revenue of RMB 24.342 billion. Thanks to a strategic transformation that actively optimizes low-margin and inefficient businesses and focuses on improving quality and efficiency, the Group's profit quality has improved by leaps and bounds, with remarkable results:

During the reporting period, the Group achieved operating profit of 356 million yuan (RMB, same below), a year-on-year increase of 15.9%, a year-on-year increase of 13.9%, a year-on-year increase of 10.8%, gross margin of 1.1 percentage points to 4.6% year-on-year, a sharp increase of 31.4% year-on-year, and net cash from operating activities of 413 million yuan, a sharp increase of 65.7% over the previous year.

2. Smart supply chain construction has advanced in depth, and the “short chain+reverse” model has achieved remarkable results

During the reporting period, the Group's revenue structure was further optimized, and the revenue share of member retail stores was further increased to 47%; the smart supply chain system of “reverse supply chain+short chain circulation+digital empowerment” was continuously improved, and three major supply chain upgrade projects — “Brand Express Project”, “Private Brand Ecosystem Project” and “Open Smart Supply Chain Project” were released in February 2025 to further strengthen the efficiency of collaboration with upstream and downstream industries:

Deepen cooperation with leading brands such as Gree, Midea, Haier, and Apple, and introduce new high-quality manufacturers such as Jiangxi Jinzhi, Wuhu Xinmei, and Guangdong Kangbao to expand the supply of high-margin products;

The consumer electronics sector deepened cooperation with Apple, and the O2O business increased 203% year-on-year, and expanded 1804 O2O stores;

The sales scale of its own brand exceeded RMB 80 million, a sharp increase of 490.7% over the previous year, indicating a substantial breakthrough in the flexible supply chain model.

In addition, the Group is actively expanding new categories of health, age-appropriate health, and quality of life, and has reached strategic cooperation with companies such as Olin Group and Boyin Hearing to jointly develop new consumption scenarios in the declining market.

Continue to make full use of our supply chain and industrial advantages, expand online operation capabilities such as e-commerce, social networking, live streaming, content cultivation, private operations, and cross-border overseas travel, and set up multiple online platform official flag stores and brand direct stores.

3. The AI+SaaS strategy has been fully implemented, and store empowerment has achieved remarkable results

In the first half of the year, the Group's service business segment generated revenue of RMB 312 million. The Group promoted the upgrade from traditional “SaaS” to “AI+” and achieved initial results in customer operations. Revenue from AI-related services broke through in the first half of the year. AI-related revenue accounted for about 20% of total service revenue, becoming a new engine for growth.

In April 2025, the Group officially launched the self-developed “Qiancheng AI Super Store Manager” app, which integrates more than 24 scenario-based AI agents (Agents), covering core business processes such as intelligent product selection, marketing planning, and customer service, which can help stores automatically complete 60% of daily management tasks. The commercialization phase began in May: Samples showed that the operating efficiency of member stores using AI tools increased by an average of 30%, and inventory turnover was reduced by 15-20%.

4. Continue to consolidate AI technical capabilities, and AI agents gradually penetrate multiple business scenarios

In the first half of 2025, Huitongda actively grasped the opportunities of AI technology revolution, systematically promoted the deep integration of artificial intelligence and industry, and built a full-scenario AI enabling system covering the supply chain, store operation and terminal services with “one cloud+three major projects” as the core framework:

The industry's first vertical model for rural business scenario training, “Thousand Orange Cloud AI”, was launched. It was registered by the National Internet Information Office in May 2025. It became one of the few exclusive large-scale models in China with the ability to adapt to the sinking market, providing AI computing power and algorithm support for the upstream and downstream of the industrial chain.

Fully implement the smart application matrix. Intelligent supply chain scenario: Connect more than 500 factories through demand forecasting algorithms to optimize inventory management and supply chain response efficiency. Smart store scenario: Using the “Qiancheng AI Super Store Manager” app as the carrier, it covers 8 core scenarios such as product management, marketing and promotion, and customer service, and automates 60% of daily management tasks. Smart terminal scenario: Launch integrated software and hardware solutions such as AI cashier terminals and edge computing devices to improve the digital level of terminals.

Deepen ecological cooperation and accelerate technology iteration. In August 2025, a full-stack AI cooperation was reached with Alibaba Cloud, which will connect Tongyi's Qianwen Big Model capabilities, jointly develop innovative applications such as the “Small Store Big Model Agent” and “AI Sales Agent”, deposit core data assets, establish multi-dimensional cooperation with Alibaba Cloud in data analysis and data assets, and continuously strengthen data asset value mining and scenario implementation capabilities.

Through a systematic AI strategic layout, Huitongda is transforming industrial data resources accumulated over ten years into intelligent productivity, gradually building an AI moat for digital retail in the sinking market, and laying a solid foundation for continuously improving the efficiency and profitability of the platform in the future.

5. Implement social responsibility and continue to improve honors

In the first half of 2025, the Group won the “Fortune China Top 500”, received many honors such as “Key Software Enterprise Encouraged by the State” and “High-tech Enterprise”, and received many surveys and high praise from governments at all levels in Jiangsu Province. The company's influence and social recognition continued to increase.

The Group's “Wande ESG Rating” was upgraded from BBB to AA, and has won many ESG awards.

6. Future Strategy: Focus on high-quality growth, strengthen digital intelligence empowerment and capital collaboration

In the second half of 2025, the Group will continue to adhere to the main line of “improving quality and efficiency and growing towards new growth”, focusing on promoting the following strategic initiatives:

Deepening the smart supply chain: On the product side, expand high-potential new consumer trend categories such as hard discounts, instant retail, smart home appliances, and age-appropriate health on the basis of continuous deepening of existing industries, and strengthen the ability to integrate in-house brand building with production and marketing. On the channel side, while consolidating the core foundation of township husband and wife stores, the Group will accelerate the layout of online channels, cross-border overseas channels, and government procurement and enterprise procurement channels, and build an omnichannel sales network.

AI+SaaS is fully empowered: On the one hand, we will deepen full-stack AI cooperation with Alibaba Cloud, accelerate intelligent technology development and implementation of scenarios, and jointly build a new “AI+ industry” ecosystem in the sinking market. On the other hand, accelerate AI agent development and commercialization, and speed up the establishment of a full-scenario intelligent agent matrix. Based on this, the Group will promote the upgrade of the “SaaS+AI+ Content” integrated service model and launch a “standard product+pay-as-you-go payment+pay-per-performance” composite pricing model to promote rapid growth in AI-related revenue and achieve high-quality and sustainable growth in service revenue.

Two-wheel drive development: Promoting “industrial development+capital operation” collaboration, using mergers and acquisitions as a starting point, focusing on mergers and acquisitions opportunities for high-quality enterprises with supply chain, channel outlets and AI technology.

The Group is confident that gross and net profit margins will increase steadily throughout the year, and will actively implement dividend plans to create long-term and stable value returns for shareholders.