Hangzhou Tongshifu Cultural and Creative (Group) Co., Ltd. (TONGSHIFU) released its first interim report since listing on the Hong Kong Stock Exchange in March 2026.

Revenue and Margins Revenue rose 10.8% year-on-year to RMB 341.51 million, driven by direct-sales growth and a larger offline footprint. Gross profit increased 7.7% to RMB 116.44 million; however, gross margin slipped to 34.1% (1H 2025: 35.1%) due to higher copper prices, additional depreciation from new capacity and promotional discounts.

Profitability Selling and marketing expenses surged 71.2% to RMB 68.38 million, mainly reflecting a jump in headcount, rent and decoration costs linked to self-operated stores, now totaling 65 as of 30 June (10 a year earlier). R&D spending climbed 31.7% to RMB 20.41 million, while administrative costs rose 50.1% to RMB 19.04 million. A foreign-exchange loss of RMB 6.51 million on IPO proceeds further pressured earnings. As a result, profit before tax turned to a loss of RMB 1.94 million and net profit fell 95.8% to just RMB 1.28 million.

Balance Sheet and Cash Total assets reached RMB 944.23 million; equity stood at RMB 792.33 million. The company remains debt-free, with a modest gearing ratio of 3.5% reflecting lease liabilities only. Cash and cash equivalents jumped to RMB 138.19 million (31 Dec 2025: RMB 6.41 million) after receiving IPO net proceeds of approximately RMB 337.9 million.

Operations and Capex A second production centre entered service in Q2 2026, lifting total capacity by over 50%. Capital expenditure in the half-year reached RMB 103.86 million, compared with RMB 6.38 million a year earlier. Inventories rose 32.5% to RMB 225.40 million to support new stores and expanded output.

Use of IPO Proceeds By end-June, TONGSHIFU had deployed 65.2% of its IPO funds, allocating RMB 111.50 million to R&D infrastructure, RMB 67.60 million to production equipment, and RMB 42.40 million to store roll-outs and marketing. Unused proceeds of RMB 117.50 million are earmarked for ongoing expansion through 2028.

Dividend and Buy-back No interim dividend was declared to preserve capital for growth. On 4 September 2026, the board announced plans to repurchase up to HK$118 million in H-shares under the existing mandate.

Share-based Incentive The board also proposed a 2026 H-Share Award Scheme; its adoption awaits shareholder approval at an upcoming EGM.

Outlook Management sees near-term profit pressure from rapid offline expansion, capacity ramp-up and continued R&D investment, but expects new stores and production lines to scale progressively and improve operating leverage.