#China #Shanghai #Fiscal 2025 #Boqii Holding #Pet Products

Boqii Holding Limited's Financial Performance Insights for 2025

Boqii Holding Limited, the leading pet-centric platform in China, has officially unveiled its unaudited financial results from the first half of fiscal 2025, concurrently ending on September 30, 2024. The company, which trades under the ticker BQ on NYSE American, is renowned for its extensive range of high-quality pet products, including well-known global brands and its own private labels.

Fiscal 2025 First Half Highlights

In this recent report, Boqii noted several key financial metrics:

• - Total Revenues: The company generated revenues of RMB 249.7 million (approximately USD 35.6 million), down from RMB 389.4 million in the same period last year. This drop is primarily attributed to Boqii's strategic pivot towards enhancing profitability rather than merely focusing on sales volume.
• - Operating Loss: Boqii reported an operating loss of RMB 27 million (about USD 3.9 million), a 14.7% improvement compared to last year’s loss of RMB 31.7 million.
• - Net Loss: The net loss narrowed to RMB 29.6 million (USD 4.2 million), marking a significant 21.6% improvement from RMB 37.7 million in the first half of fiscal 2024.
• - EBITDA: The EBITDA loss decreased by 25.4% year-over-year, standing at RMB 25 million (USD 3.6 million).

Growth in Private Labels

A noteworthy aspect of Boqii's business is the impressive growth of its private label products. The number of stock-keeping units (SKUs) offered under private labels jumped from 3,088 in the first half of last fiscal year to 3,546 this fiscal year.

• - Revenue Share: Private label revenue as a share of total income rose from 27.5% to 29.0%.
• - Gross Margin: The gross margin of private label products also improved remarkably, escalating by 330 basis points from 29.9% to 33.2%.

Cost-Reduction Initiatives

In addition to boosting private label offerings, Boqii has actively implemented measures to curtail costs and enhance operational efficiency.

• - Fulfillment Expenses: These costs saw a decrease of 46.0% from RMB 34.5 million to RMB 18.6 million, owing to optimized logistics using fulfillment centers.
• - Sales and Marketing Expenses: A reduction of 21.3% was achieved in these expenses, particularly from a decrease in advertising and third-party commissions linked to reduced revenues.
• - General and Administrative Expenses: These costs fell by 22.5%, primarily due to reduced professional fees and staff costs.

Leadership Commentary

CEO Mr. Hao Liang expressed that, despite the prevailing negative outlook and weakened consumer spending, Boqii's resilience is evident in its adjusted performance metrics. The firm's focus on private label growth is paying off, signaling effective strategic initiatives.
Co-CEO and CFO, Ms. Yingzhi Tang, highlighted the successful implementation of cost-saving strategies through improved supply chain management and a simpler organizational structure, ultimately leading to better profit margins post-fulfillment.

Future Outlook

As Boqii continues its strategic realignment towards profitability and efficiency, the company remains optimistic about its growth trajectory. With private labels gaining traction and operational costs under control, Boqii is poised to deliver enhanced value to consumers and shareholders alike, fostering a more robust financial foundation for the business moving forward.

With the financial sector continuously evolving, Boqii’s adaptability and commitment to leveraging its strengths stand as a testament to its potential in the dynamic pet products market.

As Boqii looks towards the latter half of fiscal 2025 and beyond, its strategic focus on improving existing operations while expanding its product offerings will undoubtedly attract more attention in the pet care space.