Kidsland International reported QQ3 2024 revenue of CNY 240.4 million, with a gross profit of CNY 58.97 million and a gross margin of 24.5%. The quarter produced a net loss of CNY 60.999 million and an EPS of -0.0762, reflecting ongoing profitability headwinds amid elevated operating expenses and a leveraged balance sheet. Management delivered a modest positive operating cash flow of CNY 6.28 million and a free cash flow of CNY 0.834 million, underscoring limited cash generation despite some working capital improvements. The company continues to face liquidity strain, with negative equity of CNY -89.79 million and total debt of CNY 335.52 million, resulting in a weak balance sheet profile even as short-term liquidity metrics show marginal stability (current ratio 0.962, quick ratio 0.313, cash ratio 0.0472).
Key revenue and profitability trends indicate a sequential and year-over-year slowing environment. Revenue declined -16.21% year-over-year and -2.60% quarter-over-quarter, while gross profit fell -20.15% YoY and -29.76% QoQ, pointing to reduced sales efficiency and ongoing cost pressures. Operating income remained negative at -CNY 57.16 million, with EBITDA of -CNY 44.53 million, highlighting elevated selling, general, and administrative expenses relative to top-line performance. Net income, while still negative, improved marginally by ~4.6% YoY but deteriorated ~52.2% QoQ, driven by the same margin and expense dynamics.
From a liquidity and solvency standpoint, the business exhibits constrained flexibility. Net debt stands at approximately CNY 318.9 million, and the company carries a total liability stack of about CNY 538.1 million against assets of CNY 454.2 million. The inventory turnover is subdued (inventory days ~113.5) with receivables days around 15.3, resulting in a cash conversion cycle of roughly 70.8 days. Management guidance remains unavailable in the QQ3 release, necessitating cautious interpretation of the path to sustainable profitability and balance-sheet repair. Investors should monitor capital structure actions, potential capital injections, and resolutions to working-capital efficiency as levers for a credible recovery sortie.