Zall Smart Commerce reports strong profit growth despite gross profit decline

Zall Smart Commerce Group Ltd. reported a net profit of yuan69,972,000 for the six months ended June 30, 2025, a significant increase of 71.7% from yuan40,760,000 in the same period last year. Total revenue for the Group surged by 33.2% to yuan90,921,475,000, primarily due to a 33.3% rise in supply chain management and trading business, which contributed 99.7% of total revenue.

However, the Group's gross profit decreased by 23.8% to yuan277,339,000, leading to a decline in gross profit margin from 0.5% to 0.3%, mainly attributed to the supply chain management and trading business. Other net income saw a decrease of 65.3% to yuan19,093,000, impacted by lower government subsidies and net fair value changes on forward contracts and contingent consideration.

The Group's adjusted net debt-to-capital ratio increased to 33.43% as of June 30, 2025, from 23.66% at December 31, 2024. Despite a decrease in total interest-bearing borrowings, the increase in net gearing was primarily due to a rise in adjusted net debts and a decrease in pledged bank deposits. The company noted net current liabilities of yuan4,173,039,000 but remains confident in its going concern ability due to various liquidity management strategies.