EPS of $-0.03 increased by 34.3% from previous year
Gross margin of 29.9%
Net income of -33.65M
"Transcript not available for QQ1 2025." - N/A
Kidsland International Holdings Limited (2122.HK) QQ1 2025 Earnings Analysis: Revenue Decline with Margin Pressure and Liquidity Challenges in China's Toy Retail Market
Executive Summary
Kidsland International reported a challenging start to QQ1 2025 with a consolidated revenue of 211.239 million CNY, representing a 14.4% year-over-year decline and a 12.1% quarter-over-quarter decline. The gross profit was 63.2635 million CNY, delivering a gross margin of 29.95%. Despite the gross margin, operating profitability remained negative, with EBITDA of -28.56 million CNY and operating income of -30.74 million CNY, leading to a net loss of -33.65 million CNY and an EPS of -0.0329. The earnings trajectory signals ongoing margin compression coupled with higher SG&A and marketing investments, weighing on profits despite a modest gross margin.
From a liquidity and balance-sheet perspective, the company exhibits stressed short-term liquidity, with current ratio at 0.893 and cash ratio at 0.0618, suggesting limited near-term liquidity headroom. Leverage appears elevated, with a debt-related metrics framework showing a debt ratio of 0.673 and a capital structure that, in this dataset, reflects significant liabilities relative to equity. While there are upside opportunities in brand diversification, offline-to-online channel mix, and geographic reach in Macau and Greater China, management commentary (where available) was not captured in the provided transcript dataset. As a result, the near-term investment thesis centers on a potential turnaround driven by improved cost control, disciplined inventory management, and a stabilizing Chinese consumer backdrop, contingent on execution and demand normalization.
Key Performance Indicators
Revenue
211.24M
QoQ: -12.14% | YoY:-14.42%
Gross Profit
63.26M
29.95% margin
QoQ: 7.28% | YoY:-24.65%
Operating Income
-30.74M
QoQ: 46.23% | YoY:15.30%
Net Income
-33.65M
QoQ: 44.84% | YoY:16.04%
EPS
-0.03
QoQ: 56.82% | YoY:34.33%
Revenue Trend
Margin Analysis
Key Insights
Revenue: 211.239 million CNY; YoY change: -14.42%; QoQ change: -12.14%
Gross Profit: 63.2635 million CNY; Gross Margin: 29.95% (0.2995)
EBITDA: -28.562 million CNY; EBITDA Margin: -13.52% (approx.)
Operating Income: -30.7375 million CNY; Operating Margin: -14.55%
Net Income: -33.649 million CNY; Net Margin: -15.93%
Financial Highlights
Revenue and profitability overview:
- Revenue: 211.239 million CNY; YoY change: -14.42%; QoQ change: -12.14%
- Gross Profit: 63.2635 million CNY; Gross Margin: 29.95% (0.2995)
- EBITDA: -28.562 million CNY; EBITDA Margin: -13.52% (approx.)
- Operating Income: -30.7375 million CNY; Operating Margin: -14.55%
- Net Income: -33.649 million CNY; Net Margin: -15.93%
- EPS: -0.0329 CNY; Weighted avg shares: 1.0231 billion
Cost structure and expense cadence:
- Cost of Revenue: 147.9755 million CNY
- Selling and Marketing Expenses: 97.2255 million CNY
- General and Administrative Expenses: 7.846 million CNY
- Other Expenses: -2.5245 million CNY (net)
- Total Operating Expenses: 94.001 million CNY
- Depreciation & Amortization: 4.7575 million CNY
Liquidity, efficiency and capital structure:
- Current ratio: 0.893x; Quick ratio: 0.356x; Cash ratio: 0.0618x
- Days Sales Outstanding (DSO): 16.78 days; Days Inventory Outstanding (DIO): 105.06 days; Operating Cycle: 121.84 days; Days Payables Outstanding (DPO): 68.73 days; Cash Conversion Cycle: 53.10 days
- Asset turnover: 0.580x; Inventory turnover: 0.857x; Fixed asset turnover: 4.14x
- Debt ratio: 0.673x; Debt to equity: -3.27x; Long-term debt to capitalization: 5.09x; Total debt to capitalization: 1.44x
- Valuation indicators (approximate, given negative earnings/equity metrics): P/S: 0.316x; P/BV: -0.892x; P/E: -0.496x; Enterprise value multiple: -10.22x
Segment and product mix context:
- The company maintains a broad brand portfolio across toys and related lifestyle products with a network of self-operated stores, distributors, and online channels. The QQ1 2025 results imply continued mix pressure toward SG&A-heavy, high-discount channels, which can suppress profitability if top-line momentum does not recover.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
211.24M
-14.42%
-12.14%
Gross Profit
63.26M
-24.65%
7.28%
Operating Income
-30.74M
15.30%
46.23%
Net Income
-33.65M
16.04%
44.84%
EPS
-0.03
34.33%
56.82%
Key Financial Ratios
currentRatio
0.89
grossProfitMargin
29.9%
operatingProfitMargin
-14.6%
netProfitMargin
-15.9%
returnOnAssets
-9.25%
returnOnEquity
44.9%
debtEquityRatio
-3.27
priceToBookRatio
-0.89
priceEarningsRatio
-0.5
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript highlights unavailable in the provided dataset. No earnings-call transcript was supplied for QQ1 2025, so management commentary, Q&A dynamics, and theme extraction could not be summarized. If available, we would group quotes by themes such as strategy, operations, and market conditions with precise citations.
Transcript not available for QQ1 2025.
— N/A
Transcript not available for QQ1 2025.
— N/A
Forward Guidance
No explicit forward guidance was disclosed in the provided data. Given the current revenue decline and margin pressures, the near-term trajectory will hinge on: (i) consumer demand stabilization in Mainland China and Macau, (ii) improved product mix and cost control to restore gross margins, (iii) ongoing optimization of SG&A spend, and (iv) stronger cash-generating capability to improve liquidity. Investors should monitor: consumer sentiment indicators in key markets, brand and licensing partnerships, channel mix (offline vs. online) performance, working capital trajectories (inventory days and payables), and any management updates on capital allocation or refinancing.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
2122.HK Focus
29.95%
-14.60%
44.90%
-49.60%
2022.HK
47.40%
-18.50%
-1.44%
-9.64%
2116.HK
27.50%
12.60%
1.53%
11.62%
2182.HK
0.00%
0.00%
0.00%
0.00%
2113.HK
-17.70%
-27.30%
43.10%
-6.70%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
QQ1 2025 presents a high-risk, high-uncertainty investment case. The company displayed revenue decline and continuing losses, underpinned by a stressed liquidity position and elevated leverage. The absence of available management guidance in the dataset further limits visibility into an actionable turnaround plan. The stock’s valuation reflects these risks (low P/S, negative P/BV, negative P/E, negative EV multiples). A cautious stance is warranted; a bullish thesis would require credible evidence of improved gross margins, reduced SG&A intensity, healthier working capital, and clearer liquidity relief (e.g., refinancing, improved cash conversion). Key catalysts would include a stabilizing China toy market, successful online-channel ramp, and concrete cost-control initiatives. Investors should monitor management commentary on profitability initiatives, inventory management, and any capital allocation plans.
Key Investment Factors
Growth Potential
Potential rebound in China consumer demand for toys and lifestyle products; upside from online channel expansion and omnichannel integration; opportunity from licensing deals and exclusive brand partnerships; gradual improvement in gross margins if cost controls and product mix shift favorably.
Profitability Risk
Near-term profitability risk due to elevated SG&A, high inventory levels, and working capital constraints. Liquidity stress indicated by current and cash ratios. High leverage and unusual balance-sheet signals (negative equity indicators in the dataset) could amplify sensitivity to macro shocks and promotional cycles. Competitive intensity in the toy and kids’ lifestyle segment remains elevated in Greater China.
Financial Position
Stressed liquidity profile (current ratio <1, cash ratio ~0.062) with sizable liabilities relative to equity. Margin compression and negative earnings in QQ1 2025 underscore ongoing profitability challenges. Valuation multiples are depressed (P/S ~0.32; negative P/BV and P/E), reflecting market skepticism about short-term profitability despite the brand portfolio and channel reach.
SWOT Analysis
Strengths
Broad, multi-brand toy portfolio with established brand partners and licensing relationships
Geographic reach across Macau, Mainland China, and Hong Kong with a diversified channel mix (self-operated stores, distributors, online stores, and key accounts)
Longer-term growth potential from online channels and omnichannel strategies
Weaknesses
Significant near-term profitability challenge with net loss and negative EBITDA
Stressed liquidity metrics (current ratio <1, cash ratio ~0.062) and high leverage
Inventory overhang indicated by DIO around 105 days, signaling potential working capital strain
Opportunities
Recovery in Chinese consumer spending and toy category demand
Expansion of e-commerce and online key accounts to improve reach and margin mix
Strengthened brand partnerships and exclusive distribution deals to support premium pricing
Threats
Macro headwinds in China’s consumer market and discretionary spending
Intense competition in the toy and children’s lifestyle segment
Potential supply chain disruptions and currency/FX pressures in cross-border operations