Slowing Growth Yet High Dividend Payout Ratio, Heilan Home Seeks New Path with Planned Hong Kong IPO

NightAirdropper · 2026-03-18T21:54:03+00:00

The Chinese national menswear brand HLA (Heilan Home) has faced challenges in recent years with stagnant revenue and declining net profit. Since 2019, revenue has been maintained at around 20 billion yuan, while the number of franchised stores has decreased significantly. Despite increased sales expenses, there has been no significant revenue growth, and inventory pressure remains substantial. The company plans to list in Hong Kong to drive globalization, but overseas revenue contribution is limited, and it urgently needs to reshape brand competitiveness.

NightAirdropper

2026-03-18 21:54:03

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HLA, a popular men’s clothing brand, has recently faced sluggish growth, with challenges including stagnant revenue, declining net profit, and large-scale store closures.

In 2019, the company’s revenue peaked at 21.97 billion yuan, but has since hovered around 20 billion yuan. In 2024, net profit was 2.159 billion yuan. The main brand “HLA” has seen continuous revenue decline, with a nearly 4% decrease in the first three quarters of 2025 compared to the same period last year. Meanwhile, its flagship franchise model is shrinking, with the number of stores dropping from 5,241 at the end of 2019 to 4,101 by the third quarter of 2025, a reduction of over a thousand stores.

Sales expenses increased from 2.467 billion yuan in 2019 to 4.841 billion yuan in 2024, but this did not translate into revenue growth and instead intensified profit pressure.

Franchise stores continue to decrease net, while directly operated stores have slightly increased. Inventory remains high, with stock reaching 11.518 billion yuan by the third quarter of 2025, putting pressure on turnover efficiency.

Despite a 17% decline in 2025, the company maintained high dividend payouts—over 90% of net profit for 2023-2024. The controlling shareholder, HLA Group, has pledged nearly half of its shares, prompting regulatory inquiries.

HLA plans to list in Hong Kong, claiming the move aims to promote global expansion and create a diversified capital platform. However, currently, overseas revenue accounts for only about 2%, offering limited contribution. How to break the growth deadlock and reshape brand competitiveness remains a key challenge for management.

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