PAGODA GP (02411) surged over 10% in morning trading. As of press time, the stock was up 9.14% to HK$1.91 with a trading volume of HK$5.97 million.

On the news front, PAGODA GP recently released an interim profit warning for 2025. According to analysis, the company's performance decline stems primarily from two short-term factors: store network adjustments and consumer concessions.

The company continued advancing store network optimization in the first half, closing over 700 underperforming stores to enhance overall operational efficiency. Recent brokerage research reports indicate that PAGODA GP's channel adjustments are nearing completion, with single-store customer traffic and gross margins recovering simultaneously.

The growth in single-store traffic validates the success of promotional activities in stimulating consumer demand and enhancing brand loyalty. The recovery in gross margins demonstrates that high-traffic products are gradually driving higher-margin products, signaling that the company's efforts in product mix optimization and supply chain efficiency improvements are beginning to bear fruit.

Additionally noteworthy is the company's second growth curve developed in recent years - its B2B business showing impressive growth momentum. The fruit B2B market is substantial with a highly fragmented competitive landscape, where the top 5 players account for less than 5% market share, presenting significant consolidation opportunities.

Unlike the previous market structure dominated by supermarket clients, emerging online and offline retail channels in recent years have continuously enriched fruit customer categories and market channels, a development also mentioned in the company's profit warning announcement. The emergence of new channels and business models may open up new incremental growth opportunities for the company.