Guoquan Food, a leading and fast-growing brand of home meal products in China, reported strong interim results for the first half of 2025 on August 4, with core operating profit growing alongside steady revenue gains.
The company recorded total revenue of RMB 3.24 billion (USD 453.6 million) in the first six months of the year, up 21.6% from the same period in 2024. Net profit surged 122.5% year-on-year (YoY) to RMB 190 million (USD 26.6 million), more than doubling from a year earlier. Guoquan also projected full-year shareholder returns to exceed RMB 499 million (USD 69.9 million), a 130.7% increase from the same period in 2024.
Gross margin remained stable at 22.1%, while cost controls contributed to the bottom line. Selling and distribution expenses declined to 9.5% of revenue from 11.3% a year earlier. Administrative expenses dropped to RMB 210 million (USD 29.4 million), or 6.4% of revenue, compared with 8.3% in the first half of 2024. Core operating margin rose 1.2 percentage points to 5.9%, signaling improved operational efficiency.
Expanding reach in lower-tier cities and 24-hour retail
Guoquan’s growth trajectory is underpinned by both an expanding customer base and storefront network. Registered membership rose 62.8% YoY to approximately 50.3 million, but the company’s physical stores remain its primary revenue driver.
As of mid-2025, Guoquan operated more than 10,400 stores across China, building on its network from the end of 2024. It added 270 new township-level stores in the first half of the year, part of a broader effort to reach underserved markets. These locations feature tailored product assortments and localized displays to better align with local demand.
Technology is also becoming a core enabler. More than 2,000 stores now operate with smart and unmanned systems, allowing for 24-hour service. These upgrades support round-the-clock retail, extending store availability even after regular hours.
Omnichannel strategy to drive engagement and retention
Alongside its offline push, Guoquan has built an omnichannel ecosystem encompassing its proprietary app, a WeChat mini program, third-party delivery platforms, and social media channels such as Douyin.
In the first half of 2025, the company’s Douyin content alone reportedly generated more than 3.2 billion impressions. Promotional tools, including digital coupons and bundled discounts, helped direct traffic to physical stores and contributed to a more than twofold increase in retail sales.
Guoquan’s prepaid membership model remains a key pillar in customer retention. Prepaid card balances reached RMB 590 million (USD 82.6 million) in the first half of 2025, up 37.2% YoY, pointing to growing consumer loyalty.
Brand engagement efforts also continue through “Guobao,” a cartoon mascot featured in digital campaigns. The character serves to reinforce brand identity and deepen emotional connection with consumers.
Shareholder returns bolstered by dividends and buybacks
Guoquan declared a midyear cash dividend of RMB 190 million (USD 26.6 million) during its interim earnings presentation. This follows a pending year’s end dividend for 2024 of RMB 198 million (USD 27.7 million). Together with RMB 111 million (USD 15.5 million) in share buybacks completed so far in 2025, total shareholder returns are on track to exceed RMB 499 million (USD 69.9 million), up 130.7% YoY.
Through its dense retail footprint, tighter cost structure, and continued investment in digital and physical channels, Guoquan has accelerated both top- and bottom-line growth. Its first-half performance reflects rising demand for convenient at-home dining and reinforces its strategy of positioning itself as a “central kitchen for communities.”
With growing investor interest and a clearly articulated path forward, Guoquan appears well-positioned to maintain its momentum into the second half of the year.
The company trades under the ticker 2517 on the Hong Kong Stock Exchange. In its August review, US-based index provider MSCI added the company to its China Small Cap Index, effective after market close on the 26th.
This article was published in partnership with Guoquan Food.