Huitongda Network Co Ltd (9878.HK) QQ2 2025 Results – Revenue Growth Acceleration on Commerce and Service Platform; Solid Cash Flow but Modest Profitability
Executive Summary
Huitongda Network reported QQ2 2025 revenue of 24,341,934,000 CNY, up 78.96% year over year, signaling strong top-line momentum from its commerce and service platform targeting business customers in the retail ecosystem. Despite rapid revenue expansion, gross margin remained thin at 4.64%, yielding a gross profit of 1,129,873,000 CNY and an EBITDA of 324,569,000 CNY. Operating income reached 356,122,000 CNY, with net income of 138,606,000 CNY and basic/diluted EPS of 0.26/0.24 respectively, underscoring improving but still modest profitability as scale increases.
From a liquidity and balance sheet perspective, the company maintains a prudent leverage profile: debt ratio 0.0504, debt/equity 0.197, and a cash balance per share of 7.03 CNY. Working capital dynamics appear favorable, illustrated by a current ratio of 1.364 and a negative cash conversion cycle of -46.16 days, suggesting efficient cash collection relative to payables. Free cash flow per share stands at 0.714, aligning with positive operating cash flow per share of the same amount and supporting investment flexibility.
Management commentary (as available in the provided data) cannot be quoted directly due to the absence of an earnings-call transcript. Nevertheless, the results imply ongoing emphasis on expanding the merchant ecosystem and monetizing SaaS/service offerings while pursuing cost controls to improve operating leverage. Readers should monitor gross margin progression, platform monetization metrics, and cadence of new contract wins to assess whether profitability can sustain or improve as the business scales.
Liquidity and efficiency:
- Current ratio: 1.364; Quick ratio: 1.266; Cash ratio: 0.189
- Days sales outstanding: 10.77; Days inventory outstanding: 7.95; Payables outstanding: 64.88; Cash conversion cycle: -46.16 days
- Asset turnover: 0.784; Fixed asset turnover: 148.40; Receivables turnover: 8.36; Inventory turnover: 11.32; Payables turnover: 1.387
Capital structure and cash flow:
- Debt ratio: 0.0504; Debt to equity: 0.197; Long-term debt to capitalization: 0.0187; Total debt to capitalization: 0.165
- Operating cash flow per share: 0.714; Free cash flow per share: 0.714; Cash per share: 7.03
- valuation proxies: P/E 12.92; P/B 0.903; P/S 0.294; EV/EBITDA 14.69; Price to Operating Cash Flows 17.37; Price to Free Cash Flows 17.37
Overall assessment:
The QQ2 2025 results show meaningful top-line growth driven by the company’s commerce and service platforms, with improving but still modest profitability and strong balance sheet resilience. The negative cash conversion cycle and solid cash per share point to healthy working capital management and liquidity, which should support ongoing investments in platform enhancements and merchant solutions. Investors should weigh the growth upside from expanded SaaS offerings against the current margin profile, and look for stabilization or expansion of gross margins as the company scales.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
24.34B
78.96%
0.00%
Gross Profit
1.13B
93.69%
0.00%
Operating Income
356.12M
145.08%
0.00%
Net Income
138.61M
91.64%
0.00%
EPS
0.26
100.00%
0.00%
Key Financial Ratios
currentRatio
1.36
grossProfitMargin
4.64%
operatingProfitMargin
1.46%
netProfitMargin
0.57%
returnOnAssets
0.45%
returnOnEquity
1.75%
debtEquityRatio
0.2
operatingCashFlowPerShare
$0.71
freeCashFlowPerShare
$0.71
priceToBookRatio
0.9
priceEarningsRatio
12.92
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings-call transcript was provided in the dataset. As a result, direct management quotes and thematic highlights from the call could not be extracted. The analysis below relies on reported financials and disclosed metrics. If a transcript becomes available, we can extract quotes under strategy, operations, and market conditions to enrich the narrative.
N/A
— N/A
N/A
— N/A
Forward Guidance
The company did not publish explicit forward guidance in the provided data. Based on the QQ2 2025 results and the implied trajectory of the business, the key drivers of future performance appear to be: (1) continued growth in the merchant ecosystem and expansion of SAAS/service offerings (e.g., subscriptions through Super Boss and HTD Mall-like platforms), (2) monetization of services and cross-sell to existing wholesale and retail customers, and (3) disciplined cost management to improve operating leverage as scale increases. Management commentary (where available) would be expected to address target revenue growth rates, gross margin stabilization, and capital expenditure plans. Monitoring points for investors include: onboarding and retention of merchants, contribution margin by service line, changes in discounting or incentives, product mix shifts (hardware vs. software/services), and any guidance on capex or working capital needs in the coming quarters.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
9878.HK Focus
4.64%
1.46%
1.75%
12.92%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Neutral-to-positive. The QQ2 2025 results demonstrate meaningful revenue growth and solid balance sheet strength, with cash flow generating capacity that supports ongoing investment in platform enhancements. However, the margin profile remains challenged, and profitability is currently modest. A favorable investment stance would require clearer visibility into the path to margin stabilization and sustainable profitability, as well as any explicit guidance on 2025–2026 targets. Investors should monitor: (i) progression of gross margin as SAAS and services scale; (ii) cadence of merchant acquisition and retention; (iii) capex plans and their impact on working capital; (iv) any management commentary on longer-term targets and capital allocation priorities.
Key Investment Factors
Growth Potential
YoY revenue growth of 78.96% in QQ2 2025 suggests strong demand for the company’s commerce and service platform; potential upside from greater SAAS adoption and cross-sell within the existing merchant base.
Profitability Risk
Thin gross margins (4.64%) and modest profitability may be sensitive to pricing pressure, platform competition, and changes in merchant mix; reliance on a single business model and segment mix could pose concentration risk; macro slowdown could impact transaction volumes.
Financial Position
Low leverage with debt ratio 0.0504 and debt/equity 0.197; solid liquidity with cash per share at 7.03 and current ratio 1.364. Negative cash conversion cycle indicates efficient working capital; however, the company should monitor debt levels and ensure adequate liquidity for capex in a high-growth phase.
SWOT Analysis
Strengths
Strong YoY revenue growth (78.96%), indicating robust demand for the commerce and service platform.
Low leverage and solid liquidity metrics (debt ratio 0.0504, debt/equity 0.197; cash per share 7.03).
Negative cash conversion cycle (-46.16 days), suggesting effective working capital management.
Positive operating cash flow per share (0.714) supports ongoing investments and potential shareholder value creation.
Weaknesses
Gross margin is thin (4.64%), reflecting tight unit economics or mix between commerce and services.