At the COSMO LADY (02298) 2025 performance briefing held on March 27, the company's leadership presented a narrative centered on operational efficiency and brand evolution rather than nostalgia for its heritage. Chairman and CEO Zheng Yaonan, Executive Director and Vice President Zhang Shengfeng, and CFO Cai Weixuan detailed a year marked by significant strategic shifts.
The company reported a net profit of RMB 123 million for 2025. A key highlight was the explosive growth in e-commerce, with Gross Merchandise Volume (GMV) reaching RMB 4.31 billion, a 175% year-on-year increase. While overall revenue remained stable at approximately RMB 2.95 billion, comparable to the previous year, revenue from the core intimate apparel segment grew by 4.1% to RMB 2.659 billion. More notably, the segment's performance surged by 54.8% to RMB 137 million.
A pivotal decision made two years prior—transitioning e-commerce operations to an agency model while focusing internal resources on branding, product development, and supply chain—yielded substantial results in 2025. This shift not only drove the massive GMV increase but also catalyzed a comprehensive upgrade of the supply chain, leading to the replacement of approximately one-third of the company's suppliers and material providers. E-commerce service fees alone contributed over RMB 100 million in profit, establishing it as a primary growth engine. This transformation signifies COSMO LADY's move away from the traditional "heavy-asset, high-inventory" retail model towards a more agile, brand-driven approach.
Addressing potential channel conflicts, the management outlined a clear strategy of product differentiation, tiered pricing, and mutual reinforcement between online and offline supply chains. The e-commerce-driven supply chain upgrades have subsequently benefited offline stores, contributing to growth in the first quarter of 2026 and creating a virtuous cycle of "online customer acquisition, offline experience, and omni-channel conversion." The management expressed strong confidence in achieving the 2026 e-commerce GMV target of RMB 7 billion, viewing it as validation of their evolved business model.
Beyond e-commerce, the sub-brand "Pure Cotton Living" has emerged as a successful new growth vector. Focusing on "home life for the entire family," the brand's revenue grew approximately 47% in 2025 to RMB 150 million, demonstrating a robust store model and expansion potential into new domestic markets like Northwest China and Inner Mongolia. Internationally, Vietnam serves as a testing ground, with stores opened in Hanoi and Hue in January 2026. The brand's scene-based stores, pet-friendly positioning, and design-focused products cater to overseas middle-class families. The target for 2026 is around 8 overseas stores, prioritizing store efficiency with a monthly sales target exceeding RMB 200,000 per store over rapid expansion.
This diversification reflects COSMO LADY's strategic shift from reliance on a single brand to building a multi-tiered portfolio. The main COSMO LADY brand, accounting for 88-89% of revenue, stabilizes the foundation. Ordifen anchors the high-end segment (RMB 300-800), while Pure Cotton Living, positioned in the mid-range (RMB 200-400), is the fastest-growing brand.
Financially, the company demonstrated resilience. Despite flat revenue, the quality of operating cash flow and profit improved. COSMO LADY maintained a net cash position, with bank balances and cash amounting to RMB 614 million. In response to an investor's observation that the share price is significantly below net asset value, management acknowledged the valuation appears low, with a market capitalization of approximately HKD 700 million against profits exceeding RMB 120 million. The current preference is to reward all shareholders through dividends (HKD 1.6 cents per share for 2025), while major shareholders might consider increasing their stakes at the current price level.