Net profit fell 70% in the first half of the year, but stock prices climbed 110%: the temperature difference between Helens (09869)'s expectations and reality

On August 4, Helen's (09869), the Hong Kong stock “first bistro share”, issued a profit warning for the first half of 2026. Revenue, net profit to mother, and adjusted profit declined sharply at the same time. This performance forecast, which fell short of market expectations, once again brought this once-popular offline social pub into the spotlight.

What is quite a contrast is that in the first half of 2026, the company's stock price rebounded. As of August 6, the stock price closed at HK$1.77, rising nearly 110%. The capital market apparently traded ahead of schedule on “store clearance and model restructuring” repair expectations. However, the implementation of the warning proved that the pace of fundamental recovery is also significantly slower than imagined by the secondary market.

Helens is taking the initiative to welcome a round of deep adjustments due to the combined pressure of direct business closure, price reduction and concessions, amortization of used inventory, and store disposal expenses. The market can't help but ask: Is this strategic contraction at the expense of short-term performance a necessary path to bottoming out, or is it a sign of weakening growth logic?

Net profit was pre-cut by 70%, and asset-light transformation still cannot support growth

Going back in time, expanding, shrinking, and swinging — Helens completed a complete cycle of reincarnation from activism to loss over a period of several years.

When it was launched in 2021, the number of directly-managed stores at one point exceeded 800. Relying on large-scale direct sales expansion to enter the capital market, it became the leading domestic pub circuit. However, the hidden dangers of the asset-heavy model rapidly exploded. High rents and labor costs combined to disrupt the consumption environment. In 2022, a huge loss of 1,601 billion yuan was recorded, and operating pressure forced a sharp turn in the company's strategy.

Since then, Helens has launched a drastic clean-up of stores. The number of directly-managed stores has been reduced from more than 800 at its peak to only 108 at the end of 2025. Instead, it has made every effort to promote the “Hi Beer Partner” franchise model. As of March 19, 2026, out of the company's total of 578 pubs, Hi Beer Partner stores reached 429, accounting for 74%. Joining has become the absolute main force in the store network.

However, the asset-light transformation that Helens is proud of has not brought about the expected high-quality growth.

In 2025, the company achieved revenue of 539 million yuan, a year-on-year decrease of 28.34%; at the same time, it turned a loss into a profit and achieved a net profit of 339.54 million yuan. Although losses were reversed, the profit content is questionable, that is, the reversal of losses was mainly due to the “province” — after stores were reduced and personnel were reduced, various operating expenses were drastically reduced, costs of raw materials and consumables were reduced by 29.6% over the same period last year, and expenses on employee benefits and human services were reduced by 34.9%. This is not a recovery in revenue, but a “slimming down” of costs.

Meanwhile, in 2025, Hi Beer Partner's average daily sales volume dropped from 5,000 yuan in 2024 to 4,100 yuan, a drop of 18%. Despite the decline in single-store efficiency, the share of franchise business revenue increased from 25.9% in 2024 to 34% in 2025, indicating that the company's dependence on the franchise model is deepening.

Entering 2026, the limitations of the asset-light model were further exposed. According to the profit warning announcement, Helens expects revenue of 22-260 million yuan for the first half of 2026, compared with 291 million yuan for the same period in 2025, and the operating scale continues to shrink.

The decline in revenue was mainly driven by a combination of two factors: on the one hand, the company took the initiative to shut down inefficient direct-run stores, and the total store structure changed; on the other hand, domestic consumption of casual drinking was weak, the number of customers in stores was weak, and single-store sales were under pressure. While the number of stores was replaced, single-store output was not repaired, and volume contraction occurred at the same time as quality weakness.

However, the pressure on the profit side is even more severe than revenue. The announcement expects net profit to be between 12 and 16 million yuan for the first half of the year and 50.33 million yuan for the same period in 2025, a year-on-year decrease of 68% to 76%. The decline in profits is not only due to the weakening of the consumer market, but is due to the resonance of multiple factors: a low price concession strategy was launched in April to absorb passenger flow, the original high-cost inventory continued to be amortized, and store optimization brought about one-time disposal expenses, compounding the industry's internal price pressure on gross profit. Even if the company continues to promote cost optimization and the buffer brought about by cost reduction, it is already difficult to cover the impact of declining revenue.

As can be seen, even though Helens currently chose to sacrifice short-term profits in exchange for passenger flow restoration and medium- to long-term share, the results have yet to be realized.

What is interesting is that even when the asset-light transformation has yet to be effective, Helens announced plans to restart direct management expansion in 2025. From fully shifting to joining, to going back and increasing direct management, the fluctuation in strategic direction reflects the deep difficulties of transformation.

The direct management model is too heavy, and the franchise model is too light. Helens seemed to be testing the two extremes over and over again, yet never found that “just right” balance. Coupled with incidents such as the Chinese trademark being invalidated and founder Tsui Bing-chung stepping down as CEO, uncertainty at the management level has further increased.

The “ebb” of the industry, is nearly 60 times PE expected or in vain

Zhitong Finance has observed that Helen's plight is not entirely an individual business issue; the background reflects the logical shift in the entire bistro industry.

According to statistics from the Red Food Industry Research Institute's “Tavern Development Report 2025”, the total number of tavern stores nationwide surpassed 60,000, but the overall growth rate of the industry fell to single digits; the annual market size is expected to be 117.5 billion yuan, an increase of only 4.9% over the previous year. Compared with the sharp decline in double-digit growth in earlier years, the agency predicts that the market size will only approach 187.34 billion yuan until 2028. The long-term growth slowdown is a foregone conclusion. The racetrack moved from an expansion phase where “you can make money by opening a store” to “compete for operation and passenger flow” stock competition.

Structural changes on the consumer side have further reduced the industry's profit margins. The underlying needs of young people who are slightly addicted to socializing still exist, but the consumer mentality has changed drastically: differentiated brands such as COMMUNE and sea diving continue to divert traffic, consumer choices are becoming more and more diverse, and the extreme low price strategy that Helens started with no longer has an exclusive advantage.

At the same time, the consumption scenario is shifting. Demand for dine-in and ready-to-drink restaurants in traditional nighttime business districts is weak, and household self-catering and instant online retail are rapidly rising. Chain pub chains that are highly dependent on offline nighttime scenes must readapt to consumption habits, and the resilience of a single business model to risk has been drastically reduced.

In such a development environment, Helens has to face not only the pain of her own transformation, but also the “coming-of-age ceremony” of the entire racetrack.

Judging from the changes in the business model, Helens has left the era of rapid expansion of asset-heavy direct management in the past and switched to an asset-light route of “reducing the scale of direct management and expanding the partnership of Hi Beer.” Direct stores continue to shrink, and the share of franchise stores continues to rise in an attempt to reduce the rigid cost of rent and labor.

For Helens, asset-light transformation is a survival option, but it is not a panacea for growth. Direct sales have been completed, and the proportion of franchised stores has increased. This is only the first step in completing the mode switch. What the capital market is really waiting for is not that the numbers on the store's statements disappear from place to place, but rather that same-store sales stabilize, gross margin is repaired, and revenue scale stops falling and rebounding.

This can also be seen in the secondary market's attitude towards it.

Judging from the path of valuation evolution, the Helens valuation bubble has already completely cleared up. On the first day of listing in September 2021, the stock price reached a high of HK$25.75, with a peak market capitalization exceeding HK$30 billion; now the stock price is hovering around HK$1.80, down more than 93% from its all-time high. Stock prices ushered in a round of market recovery in the first half of 2026. The core trading logic is “the worst time has passed” — inefficient stores have been cleared, interest-bearing debts have been cleared, and cash on the books has built a safety cushion. The market is betting on performance flexibility after the asset-light transformation is completed.

However, the implementation of the profit warning proves that expectations can be hyped up ahead of time, and there is a natural time lag for fundamental restoration.

Currently, Helens's nearly 60-fold valuation mainly shows two aspects: the downward margin of safety is that the market value is small and there is no debt pressure. Once the single-store model recovers, the upward elasticity of performance is sufficient; the factors that suppress upward valuation are also rigid, and revenue is still in a contraction channel. Profits are easily disturbed by inventory amortization and one-time expenses, and the high price-earnings ratio makes it difficult to support the continued rise in valuation.

In summary, it's easy to see that Helens is currently at a delicate crossroads. Active contraction of fundamentals and a lightweight rollout are beneficial, but profit recovery requires long-term data verification; demand remains unchanged for a long time on the industry side, but short-term competition for internal volume and passenger flow diversion are hard problems; game space exists objectively after the valuation side plummets, but it is difficult to break out of the trend without performance support.

However, whether Helens can hand over a questionnaire that satisfies the market, the answer is not in the announcement; it is in the next quarter's single-store daily sales data.