Kidsland International Holdings Limited (“Kidsland” or the “Group”; stock code: 2122), the largest toy retailer and distributor in China, today announced its interim results for the six months ended 30 June 2019 (“the reporting period”). During the reporting period, thanks to sustainably improving revenue growth and better cost control, the Group improved its profitability, laying a solid foundation for sustaining growth in the future.
During the reporting period, net loss was approximately RMB1.9 million, 96.1% lower than that in the same period last year, and adding back non-cash share-based compensations, the Group would record a net profit of approximately RMB3.0 million. EBITDA, prepared on a basis comparable to that used in the prior period, is approximately RMB19.9 million, improving from an EBITDA loss of approximately RMB28.7 million last year.
Revenue of the Group increased by about 4.8% to approximately RMB850.0 million (first half of 2018: RMB811.1 million), with gross profit at approximately RMB361.5 million (first half of 2018: RMB347.0 million) growing by about 7.8%, and gross profit margin improved to about 42.5% in the reporting period. The Group managed to reduce selling and distribution and general and administrative expenses for the period by about 4.7% year-on-year. Increased revenue and gross profit margin and decreased expenses combined translated into significant improvement of the Group’s results.
The Group has an extensive sales network comprising self-operated retail channels and wholesale channels. In the reporting period, the Group optimized its sales network by closing down underperforming shops and resizing and remixing the Group’s product portfolio. As at 30 June 2019, it had 750 (30 June 2018: 781) self-operated retail points of sale, consisting of retail shops and consignment counters, and 849 distributors (30 June 2018: 973). The optimized sales network has allowed the Group to continue to enjoy stable revenue growth and improve efficiency, and in turn, profitability.
The Internet has become a main distribution channel in Mainland China. To leverage on the power of the Internet, the Group operates 20 online stores and has seven online key accounts on platforms such as Tmall, JD.com, Xiaohongshu and Kaola. During the reporting period, the Group’s direct e-commerce (online stores and online key accounts) revenue was RMB80.7 million, growing about 21.4% year-on-year and as of 30 June 2019, represented about 9.5% of the Group’s total revenue (2018: about 8.2%).
In the first half of 2019, the Group also took a big step forward by opening the FAO Schwarz flagship store in Beijing. The store, striving to offer high-quality experiential shopping, has set new heights in the toy industry in Mainland China, bolstered the Group’s reputation, and cemented the Group’s leading position in the marketplace.
Mr. Lee Ching Yiu, Chairman and CEO of Kidsland, said, “Although the mainland economy is going through adjustments and the Sino-US trade war continues, adding uncertainty to the outlook of the retail market, we remain focused on improving our product and sales channel mix and operational efficiency, and we are glad to see our efforts bearing fruit. We believe we are well-positioned to make performance leaps in the near future.”
About Kidsland International Holdings Limited (stock code: 2122)
Kidsland International Holdings Limited (“Kidsland” or “the Group”) is engaged in retail, wholesale, e-commerce and brand operation of toys and infant products in China. As the largest toy retailer and distributor in China, Kidsland has over 18 years of industry experience. The Group owns the most comprehensive online and offline sales network in China. Currently, its self-operated offline retail system includes Kidsland and Babyland stores, LEGO Certified Stores, and the FAO Schwarz flagship store. With concepts of and experience in brand building, value appreciation and maintenance, outstanding marketing capabilities, and flexible use of online and offline marketing strategies, Kidsland has built a leading toy and infant products distribution franchise in China.
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Vicky Lee Tel: (852) 2864 4834 Email: vicky.lee@sprg.com.hk
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Queenie Lee Tel: (852) 2114 2881 Email: queenie.lee@sprg.com.hk
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