On May 12, GOODBABY INTL (01086.HK) released its financial report for the first quarter of 2026. During the period, the group achieved revenue of HKD 2.166 billion, representing a year-on-year increase of 6.4%.

However, when calculated on a constant currency basis, the period's revenue actually experienced a slight year-on-year decrease of 0.9%. The "scissors gap" of over 7 percentage points between the apparent positive growth and the actual negative growth highlights the embellishment effect of foreign exchange fluctuations on reported revenue.

Excluding the currency translation benefit, the group's actual business delivery volume did not achieve substantive expansion under the macro headwinds of weak global demand for infant and child products.

Analyzing the fundamentals, the group's revenue is accelerating its concentration towards a single leading brand.

As the current absolute core engine, the strategic brand CYBEX recorded revenue of HKD 1.293 billion in the first quarter, a year-on-year increase of 12.9%, continuing its previous high-growth momentum. Leveraging its mid-to-high-end positioning and omnichannel layout, CYBEX has continued to gain market share against the trend.

The flip side, however, is that this brand's revenue share is approaching 60% of the group's total. Once the demand resilience in high-end markets like Europe and the US peaks, or if the brand's innovation momentum slows, the group's overall performance will face significant volatility risks due to its deep ties to a single brand.

In contrast, the other two core brands are undergoing deep strategic adjustments.

Evenflo, primarily focused on North America, saw a slight revenue increase of 3.1% in the first quarter, showing initial signs of stabilization after experiencing double-digit declines in 2025. The DTC strategy has driven a recovery in stroller and home categories, but the competitive North American market means historical challenges still require time to resolve.

In its home market of China, the gb brand recorded a slight revenue decline.

Since 2025, gb has proactively reduced low-margin and outdated product lines, focusing resources on core durable goods like car safety seats. Although growth in specific categories is strong and the profit structure has improved, in the short term, this incremental growth is not yet sufficient to fully offset the revenue gap left by the clearance of low-end categories.

Furthermore, the Blue Chip OEM business recorded a decline in the first quarter.

Management attributed this to the high base effect from customer orders being pulled forward in the same period last year, which also reflects the group's long-term strategy of "emphasizing brands, de-emphasizing OEM."

Notably, when viewed over a longer observation period, although the group's gross profit margin remains at a healthy level above 51%, high operating expenses, supply chain, and raw material costs continue to erode final profits. The full-year 2025 net profit attributable to owners of the parent company once fell by over 38%. The optimization of the revenue structure has not smoothly translated into ample net profit.

Overall, GOODBABY INTL's first-quarter report presents a typical case of "structural divergence," with CYBEX acting as the performance anchor, striving to offset gb's transition pains and the cyclical downturn of the OEM business.

As the global market for infant and child durable goods fully enters a phase of competition for existing customers, the 0.9% negative growth on a constant currency basis has sounded an alarm. How to accelerate the substantive bottoming out and rebound of Evenflo and gb while controlling rigid expenditures is a long-term challenge that management urgently needs to address.