Red Flag Chain (002697) expects a decline in net profit in 2025 due to the impact of policy adjustments and previous income tax from its subsidiary wholesale company.

Hongqi Chain (002697) announced on March 25. With the overall consumer market under pressure, the industry’s competitive ecosystem has shown disorderly and homogenized characteristics. Combined with the company’s optimization and adjustments to its back-end stores in 2025, the revenue scale was slightly affected. The company reported total operating revenue of 9.556 billion yuan, down 5.61% year over year; total profit of 658 million yuan, up 9.41% year over year. On the one hand, thanks to the company’s optimization and adjustments to its stores, and also by actively seeking returns from management, both selling expenses and management costs were reduced significantly, effectively offsetting the impact of the external environment. On the other hand, in 2025, the jointly held Xinyang Bank performed well, and the company’s investment income increased accordingly. Due to impacts such as income tax from the prior period at its wholesale subsidiaries caused by policy adjustments, net profit attributable to shareholders of the listed company decreased 7.78% year over year, recording 481 million yuan. This will not materially affect profit for subsequent operations.

Tongbi Finance learned that the company’s main business is the chain operation of convenience supermarkets. With “convenient, affordable, and reliable” as its business characteristics, it has maintained a steady development momentum for many years, and has developed into an “internet+ modern technology” chain company featuring a cloud platform big data + products + community services + finance.