Executive Summary
HC Group Inc reported QQ1 2025 revenue of 3,006,484,000 CNY, up 18.8% QoQ and 1.83% YoY, reflecting a meaningful sequential uptick driven by higher activity across its technology-driven and digital services platforms. The quarter yielded an EBITDA of 10,048,000 CNY and an operating income of 7,245,500 CNY, marking a sharp swing from the Q4 2024 period, which posted negative operating income and negative EBITDA. Despite the positive operating trajectory, HC Group remains cash-flow negative on a net basis with a net loss of 11,364,000 CNY and an EPS of -0.0087. Gross profit reached 113,145,000 CNY for QQ1 2025, with a gross margin of 3.76%, up from the prior quarter’s margin but still well below typical IT services benchmarks, signaling ongoing cost-to-revenue challenges or a low-margin mix of services and platforms.
The improvement in operating profitability alongside a robust QoQ revenue uptick suggests the company is stabilizing its cost base and benefitting from better revenue mix, possibly from higher-margin digital services, platform monetization, and B2B/B2C offerings. However, the persistent net loss, modest gross margins, and the absence of detailed R&D spend data warrant close attention to cost structure, working capital efficiency, and the ability to translate operating earnings into positive bottom-line cash flow. Investors should monitor margin expansion catalysts, the execution of platform strategies (hc360, zolcomcn, and Union Cotton/ibuychem platforms), and any management guidance on profitability targets for 2025.
Key Performance Indicators
QoQ: 127.13% | YoY:206.91%
Key Insights
Revenue: 3,006,484,000 CNY; YoY: +1.83%, QoQ: +18.80%
Gross Profit: 113,145,000 CNY; Gross Margin: 3.76%; YoY Gross Profit: +17.46%, QoQ: +6.07%
EBITDA: 10,048,000 CNY; EBITDA Margin: 0.33%
Operating Income: 7,245,500 CNY; Operating Margin: 0.24%
Total Other Income/Expenses: -12,388,500 CNY (net)
Income Before Tax: -5,143,000 CNY; Income Tax Expense: 1,495,500 CNY
Net Income: -11,364,000 CNY; Net Income Margin: -0.38%
EPS (Diluted): -0.0087 CNY; Weighted Avg Shares: 1,306,206,896
Observations: P...
Financial Highlights
Revenue: 3,006,484,000 CNY; YoY: +1.83%, QoQ: +18.80%
Gross Profit: 113,145,000 CNY; Gross Margin: 3.76%; YoY Gross Profit: +17.46%, QoQ: +6.07%
EBITDA: 10,048,000 CNY; EBITDA Margin: 0.33%
Operating Income: 7,245,500 CNY; Operating Margin: 0.24%
Total Other Income/Expenses: -12,388,500 CNY (net)
Income Before Tax: -5,143,000 CNY; Income Tax Expense: 1,495,500 CNY
Net Income: -11,364,000 CNY; Net Income Margin: -0.38%
EPS (Diluted): -0.0087 CNY; Weighted Avg Shares: 1,306,206,896
Observations: Positive delta in operating profit and EBITDA indicates improved operating efficiency, but the net loss persists due to non-operating charges and tax effects. Margin metrics remain constrained by a low gross margin and ongoing cost structure.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.01B |
1.83% |
18.80% |
| Gross Profit |
113.15M |
17.46% |
6.07% |
| Operating Income |
7.25M |
206.91% |
127.13% |
| Net Income |
-11.36M |
64.04% |
89.94% |
| EPS |
-0.01 |
37.86% |
87.00% |
Management Commentary
Transcript highlights not provided in the prompt. If available, extract management themes such as strategy execution, platform monetization, cost containment, and market conditions. Recommend adding a concise thematic summary once the earnings call transcript is supplied.
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— Management
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— Management
Forward Guidance
No explicit fiscal-year 2025 guidance was provided in the data supplied. Given the QoQ revenue acceleration and the swing to positive operating income, investors should look for management commentary on: (1) target gross margin improvement and the mix shift toward higher-margin SaaS/digital services, (2) cost control and operating leverage, especially in SG&A and other operating expenses, (3) the trajectory of platform monetization across HC360, zolcomcn, Union Cotton, and ibuychem.com, and (4) planned capital deployment and potential debt or liquidity actions. In the absence of formal guidance, a base-case scenario would hinge on continued revenue momentum, modest gross-margin expansion to mid-single digits, and stabilization of operating expenses to sustain a positive operating result while monitoring net-income drivers in non-operating items.