In the first half of the year, net profit is expected to drop by 70%, yet the stock price has risen by 110%: The temperature difference between expectations and reality for HELENS (09869).

On August 4, the Hong Kong stock "first stock of small taverns" HELENS (09869) issued a profit warning for the first half of 2026, indicating a significant decline in revenue, net profit attributable to shareholders, and adjusted profits. This performance forecast, which falls short of market expectations, once again places the once-thriving offline social tavern leader under the spotlight. In stark contrast, the companys stock price rebounded in the first half of 2026. As of August 6, the stock closed at HKD 1.77, a nearly 110% increase. The capital market has clearly already begun trading based on expectations of store clearance and model restructuring. However, the actual warning confirms that the pace of fundamental recovery is significantly slower than what the secondary market anticipated. HELENS is proactively confronting a deep adjustment under multiple pressures such as store closures, price reductions, amortization of old inventory, and disposal expenses. The market cannot help but question whether this strategic contraction, which sacrifices short-term performance, is a necessary path to bottoming out or a sign of weakening growth logic. Net profit is expected to drop by 70%, and the light-asset transformation still fails to support growth. Looking back over its development, HELENS has gone through a complete cycle from aggressive expansion to confusion over several years. When it went public in 2021, the companys number of directly operated stores exceeded 800, relying on large-scale expansion to enter the capital market and becoming the leader in the domestic tavern sector. However, the hidden dangers of the heavy asset model quickly emerged, with high rents and labor costs compounded by disruptions in the consumption environment, leading to a staggering loss of 1.601 billion yuan in 2022 that forced the company to urgently pivot its strategy. Since then, HELENS has embarked on a sweeping store clearance, reducing the number of directly operated stores from over 800 at its peak to only 108 by the end of 2025, while vigorously promoting the "Hi Beer Partner" franchise model. As of March 19, 2026, out of a total of 578 taverns, there are 429 Hi Beer Partner stores, accounting for as much as 74%, making franchises the absolute mainstay of its store network. However, the much-touted light-asset transformation at HELENS has not delivered the expected high-quality growth. In 2025, the company achieved revenue of 539 million yuan, a year-on-year decline of 28.34%; at the same time, it turned a profit with a net profit of 33.954 million yuan. Although the company returned to profitability, the quality of its earnings is questionable, primarily relying on cost savings following the reduction in stores and personnel, operational expenses were significantly compressed, with costs for raw materials and consumables down 29.6% year-on-year, and employee benefits and manpower services expenses reduced by 34.9%. This is not a recovery in revenue but rather a slimming down of costs. At the same time, in 2025, the average daily sales per Hi Beer Partner store dropped from 5,000 yuan in 2024 to 4,100 yuan, an 18% decline. Despite the decrease in same-store efficiency, revenue from franchise business increased from 25.9% in 2024 to 34% in 2025, indicating a growing reliance on the franchise model. Entering 2026, the limitations of the light-asset model have become more evident. According to the profit warning announcement, HELENS anticipates revenue of 220 to 260 million yuan for the first half of 2026, compared to 291 million yuan in the same period of 2025, with operational scale continuing to shrink. The revenue decline is driven by two main factors: on one hand, the company is proactively shutting down inefficient self-operated stores, resulting in a change in the total number of stores; on the other hand, domestic consumption of alcoholic beverages for leisure is weak, leading to a decline in customer traffic and sales per store in existing outlets. As the number of stores decreases, the output of each store has not recovered, resulting in simultaneous quantity contraction and quality weakness. Profitability pressures are more severe than revenue. The announcement predicts net profit attributable to shareholders for the first half of the year will be between 12 million to 16 million yuan, down from 50.33 million yuan in the same period of 2025, representing a year-on-year decline of 68%-76%. The profit decline is not solely due to weak overall consumption but is also a result of multiple factors: the initiation of a low-price strategy to attract customers in April, ongoing amortization of high-cost inventory, one-time disposal expenses related to store optimization, and industry price competition squeezing gross margins. Even as the company continues to push for expense optimization, the buffer provided by cost reductions is insufficient to cover the impact of falling revenues. It can be seen that while HELENS is currently sacrificing short-term profitability in exchange for customer flow recovery and longer-term market share, the results have yet to materialize. Interestingly, just as the light-asset transformation has yet to show results, HELENS has announced a resumption of its direct-operated expansion plan in 2025. This shift from a focus on franchises back to a commitment to direct operation reflects the deep-seated challenges of its transformation. The direct operation model is too heavy, while the franchise model is too light. HELENS seems to be fluctuating between two extremes but has failed to find the just right balance point. Coupled with events such as the invalidation of its Chinese trademark and the resignation of founder Xu Bingzhong as CEO, uncertainties on the operational front have further escalated. The industry tide recedes; is a PE of nearly 60 times a prediction or an illusion? GMTEight observes that HELENS's predicament is not merely an individual business issue but reflects a broader shift in the entire tavern industry. According to the 2025 Tavern Development Report by the Red Restaurant Industry Research Institute, the total number of tavern stores nationwide surpassed 60,000 in 2025, but the overall industry growth rate has fallen to single digits; the annual market scale is expected to be 117.5 billion yuan, only growing 4.9% year-on-year, a sharp slowdown compared to earlier double-digit growth estimates. Institutions predict that the market will only approach 187.34 billion yuan by 2028, confirming that long-term growth has slowed. The market has shifted from a phase where opening stores guarantees profits to one characterized by competition in operations and customer flow. Structural changes on the consumer side further compress profit margins within the industry. The underlying demand for mildly intoxicated social interactions among young people still exists, yet their consumption mentality has significantly changed: differentiated brands like COMMUNE and Jumping Sea continue to siphon off customers, and consumers are increasingly diverse in their choices. HELENS's aggressive low-price strategy, which formed the foundation of its success, no longer holds exclusive advantages. Simultaneously, consumption scenarios are shifting; traditional nighttime dining areas and on-site dining demands have weakened, with home consumption and online instant retail rapidly emerging. Chain taverns that heavily rely on offline nighttime scenarios must adapt to new consumption habits, with their single operating models resistance to risk substantially weakened. In this evolving environment, HELENS faces not only its own transformational pain but also the coming of age for the entire sector. From the perspective of changes in operating models, HELENS has bid farewell to the era of aggressive expansion through heavy-asset direct operations, shifting towards a light-asset route of reducing direct operation scale and expanding Hi Beer Partner franchises. The number of directly operated stores continues to shrink, while the proportion of franchise stores increases, attempting to reduce fixed costs such as rent and labor. For HELENS, the light-asset transformation is a choice for survival but not a panacea for growth. Completing the clearance of direct-operated stores and increasing the share of franchise stores is merely the first step in switching models. What the capital market is genuinely waiting for is not merely the ebb and flow of numbers on store reports but a stabilization in same-store sales, a recovery in gross margins, and a halt in falling revenue scales. This point can also be gleaned from the secondary markets attitude towards the company. In terms of valuation evolution, HELENS's valuation bubble has already cleared out. On its listing day in September 2021, the stock price peaked at HKD 25.75, with market capitalization exceeding HKD 30 billion; now the stock price lingers around HKD 1.80, down more than 93% from its historical high. In the first half of 2026, the stock witnessed a rebound, with the core trading logic being that the worst moments are over the clearing of ineffective stores, zero interest-bearing debt, and cash reserves built as a safety net have led the market to bet on performance elasticity following the completion of the light-asset transformation. However, the concrete realization of the profit warning demonstrates that while expectations can be speculated upon in advance, there exists an inherent time lag in fundamental recovery. Currently, HELENS's nearly 60 times valuation reveals a dual nature: its downward safety margin lies in its small market capitalization and lack of debt pressure, suggesting that once the single-store model recovers, there is ample elasticity for performance; conversely, upward valuation factors remain rigid, with revenues still in a contraction phase, and profit easily disrupted by inventory amortization and one-time expenses, making high price-to-earnings ratios challenging to sustain. In conclusion, it is evident that HELENS is currently at a delicate crossroads. The proactive contraction of its fundamentals and a leaner approach is beneficial, but the recovery of profitability requires long-term data validation; while there is a consistent underlying demand for mildly intoxicated consumption in the industry, short-term competition and customer flow diversion present hard challenges; the significant drop in valuation creates objective opportunities for speculation, yet without performance support, it is difficult to break out of a trending market. Whether HELENS can deliver a satisfactory answer to the market lies not in the announcement but in the upcoming quarterly same-store sales data.