An inflection point in performance has emerged, and Youquhui (02177) is accumulating future growth momentum

On August 29, Youquhui (02177) handed over the 2025 mid-term questionnaire: revenue of 580 million yuan and net profit of 11.2 million yuan. On the surface, there appeared to be “zero growth”. However, excluding the impact of non-recurring projects and discontinued cooperative brands, revenue still increased 2.5% year over year, and net profit remained basically flat; gross margin bucked the trend and increased 4.6 percentage points to 34.6%.

Zhitong Finance believes that behind this set of hidden data, two clear main lines have surfaced: one is “subtraction” — Youkuhui actively divests low-margin brands and channels; the other is “addition” — around the Big Health Circuit, the company is actively developing products and stepping up the cultivation of its own brands. And the intersection of these two value leads may also indicate that Youkuhui is about to reach an important inflection point.

Subtraction: Get rid of burdens and make room for profit

Looking at Youkuhui's financial reports over the past few years, it's easy to see that the company has always insisted on doing the same thing, which is to actively divest low-profit brands and channels. Needless to say, although this has disrupted the company's overall revenue to a certain extent in the short term, it has also led to a continuous improvement in profitability. According to the data, in 2022 to 2024, Youkuhui's comprehensive gross margin was 23.9%, 26.3%, and 30%, respectively, showing a “double jump” trend, and the growth rate increased year by year. According to Youkuhui's latest financial report, the overall gross margin of Youkuhui rose to 34.6% in the first half of this year, and hit a new phased high.

The profit potential of Youkuhui has been unleashed at an accelerated pace, and it is closely linked to the company's initiative to “squeeze moisture” out low-profit brands and channels. For example, in the field of adult personal care products, Youkuhui made strategic adjustments in the first half of the year and terminated cooperation with a certain care brand; for example, in the field of beauty products, Youkuhui also sorted out some beauty brands and terminated cooperation with some brands. In addition, in the first half of the year, Youkuhui also terminated some e-commerce operations where business growth had stagnated.

For Youkuhui, which is currently in a critical transition period, short-term fluctuations in revenue and net profit indicators are not worth overreading; on the contrary, the trend of rising gross margin, which is constantly being strengthened, requires more attention. After all, this also probably indicates that more of the company's performance indicators will be improved and optimized one after another in the future.

Addition: the Big Health Track is rich in thin hair

As public health awareness continues to heat up and demand for functional health foods is rapidly released, Youquhui chose the Big Health Circuit as the first stop for its diversified transformation. One background worth mentioning here is that before that, Youquhui actually had a long history of experience in the field of health. Many of Japan's century-old pharmaceutical companies such as Taisho Pharmaceutical, Daiichi Sankyo, Ota Weisan, and Kobayashi Pharmaceutical all maintained deep cooperation with Youquhui.

In the first half of this year, the revenue growth rate of the Youkuhui Health sector reached 42.9%, and it is already the “main force” contributing to the company's growth. Behind the strong growth performance, Youkuhui's own brand, Vanpearl, received strong revenue of 14 million yuan during the market development period. According to reports, the star product ERGO-Vitalis™ capsules launched by VanPearl achieved outstanding market sales results once it was launched, which verified the success of the incubation model for health products with gene repair efficacy using ergot sulfur as the main ingredient. In addition, in the first half of the year, Youkuhui also introduced a number of new brands with a strategic vision, such as PrecisionBiotics (PrecisionBiotics), Alcon (Alcon), and Santen Pharmaceuticals (Santen), which are high-end probiotic brands under Novonesis (Novonesis). The company's “circle of friends” in the health circuit continues to expand, which also means that Youquhui's brand volume and market influence in this field will rapidly increase in the future.

In addition to vigorously incubating its own health food brands and continuing to introduce more new health brands, Youkuhui also adjusted health product strategies and channels and optimized product selection strategies in the first half of the year. This led to a sharp increase in sales volume during the reporting period for many of its main products, and the B2B channel also ushered in breakthrough growth. Based on the current phased results, it can probably be said that Youquhui is accelerating the construction of a “preferred product x efficient channel” two-wheel drive growth pattern on the Big Health Track.

Attack more and save more momentum for growth

In a sense, Youkuhui's interim report can be said to be a questionnaire with its own “sense of the future.” Due to the fact that the company is still in a strategic investment period, Youkuhui's core financial indicators did not immediately draw a steep growth curve, but judging from the business development situation and operating trends, it is easy to find that Youkuhui's long-term growth path is actually very clear.

In addition to the initial release of potential on the health circuit, judging from the new signals released in the Youku Report, overseas expansion will also be one of the company's key points in cultivating long-term competitiveness. According to reports, in the future, Youquhui will adhere to the strategy of “local compliance first, brand story first, and deep channel cultivation in parallel”, prioritize the Southeast Asian and North American markets, and achieve a simultaneous increase in brand volume and penetration rate in overseas markets through cross-border DTC and ecological linkage with local KOLs.

Furthermore, in addition to financial reports, Youkuhui previously issued an announcement stating that the funds originally planned to “seek strategic investment in technology companies and O2O service providers” will be used to “acquire and seek strategic investment and cooperation with brands in the health and beauty sector.” In the author's opinion, this move to change the use of capital also sends a strong signal: that is, Youkuhui is using its financial resources to seek more mergers and acquisitions opportunities in order to seize more favorable development opportunities.

Go ahead and save more momentum for growth. This kind of YouFun Exchange will probably also be a target that investors in the capital market who prefer a growth style will be happy to see. According to Zhitong Finance, it may be necessary for investors in the secondary market to re-evaluate Youkuhui's future growth potential based on the company's financial reports. After all, in the current market environment where uncertainty and complexity are deeply intertwined, Youquhui, which has a clear long-term growth path, is expected to become a high-certainty investment target.