Best Food Holding Company (1488.HK) Q2 2025 Earnings Report

Overview: Best Food Holding’s QQ2 2025 results reveal a meaningful top-line acceleration but significant bottom-line headwinds driven by non-operating items and leverage dynamics. Revenue reached 195.45 million CNY, rising 62.6% year over year, with gross profit of 39.37 million and a gross margin of 20.14%. Operating income stood at 23.41 million (approx. 11.97% margin), while EBITDA was negative at -10.57 million and net income posted a loss of -32.86 million, yielding an EPS of -0.0208. Net income weakness is largely attributable to substantial other income/expenses (total net other income and expenses of -58.97 million) that overshadow operating profitability. Free cash flow was positive at 6.32 million CNY, with operating cash flow of 8.31 million and capital expenditure of 1.99 million, signaling the capacity to generate cash despite the net loss. Balance sheet and liquidity present a meaningful risk: total assets of 772.97 million CNY versus total liabilities of 1,023.16 million CNY, resulting in negative shareholders’ equity of -276.48 million CNY. The company carries a relatively high debt burden (total debt of 776.35 million CNY, with short-term debt of 731.71 million CNY) and exhibits very weak liquidity metrics (current ratio 0.178, quick ratio 0.158, cash ratio 0.0267). These metrics imply a challenging near-term liquidity runway and a sensitivity to working capital fluctuations. Strategic read: The revenue trajectory suggests demand traction in Best Food’s Chinese fast food and hot pot concepts, potentially supported by store expansion and/or franchising. However, profitability remains constrained by non-operating charges and a debt-laden balance sheet. Absent a clear deleveraging plan and margin enhancement, the valuation remains clouded by leverage risk. No earnings-call transcript is available in the provided data, so there is limited visibility on management’s explicit forward guidance. Investors should monitor deleveraging progress, stabilization or expansion of gross margins, and operating-expense control as near-term catalysts or risks.