Ginza Co., Ltd.'s 2025 performance is "inflated": net profit attributable to shareholders is nearly 60 million yuan, but after deducting non-recurring gains and losses, it is less than 7 million yuan.

Ask AI · Ginza Holdings’ non-recurring net profit plunges—how do non-recurring gains and losses support earnings?

Everyday Economic News reporter: Peng Fei Every day Economic News editor: Chen Junjie

Recently, Ginza Holdings (SH600858)’s 2025 annual report has been released.

According to the annual report, in 2025 Ginza Holdings achieved operating revenue of RMB 5.282 billion, down 2.52% year over year; attributable net profit was RMB 59.2511 million, down 12.42% year over year. Meanwhile, net profit after deducting non-recurring gains and losses was less than RMB 7 million, down more than 45% year over year.

A reporter from The Economic Daily noticed that non-recurring gains and losses constitute the main support for Ginza Holdings’ profit, while the growth momentum of its retail core business is clearly insufficient—revenue from its department store business segment fell by more than 14%. At the same time, short-term borrowings of over RMB 2.3 billion reflect the company’s significant debt pressure, and when combined with goodwill impairment of more than RMB 14 million for Shijiazhuang Dongfang City Plaza, it further erodes profit headroom.

Against this backdrop, Ginza Holdings is trying to activate its stock of assets by filing for publicly offered infrastructure REITs (real estate investment trusts). However, faced with fierce industry competition, this path to break through remains full of uncertainties.

Non-recurring-deducted net profit near RMB 7 million—retail main business faces a test

In 2025, Ginza Holdings’ total profit was RMB 144 million, down 4.05% year over year; attributable net profit was RMB 59.2511 million, down 12.42% year over year.

A reporter from The Economic Daily noticed that after stripping out non-recurring gains and losses, the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses fell sharply, only RMB 6.9974 million, with a year-on-year decline of 45.60%.

For the double decline in both revenue and net profit, Ginza Holdings stated plainly in its annual report: “Due to the current retail industry’s intense competition and consumers becoming more rational in their spending, the company’s operating performance declined.”

Notably, the annual report shows that in 2025 Ginza Holdings’ total non-recurring gains and losses amounted to RMB 52.2537 million. Among them, the entrusted management-related fee income reached RMB 33.4074 million; profit and loss from the disposal of non-current assets (including the offsetting portion of accrued asset impairment provisions) was RMB 14.252 million; and government subsidies recognized in current profit and loss totaled RMB 6.0059 million.

From the above data, it is not hard to see that compared with non-recurring-deducted net profit of less than RMB 7 million, non-core business gains such as entrusted fees and asset disposals are the key drivers that helped Ginza Holdings maintain the scale of its book net profit in 2025.

Meanwhile, Ginza Holdings’ retail main business is also facing challenges. In 2025, the company’s commercial main business revenue was RMB 4.168 billion, down 3.31% year over year. Its gross margin was 27.39%, down 0.77 percentage points from the previous year. Broken down by operating formats, as an important pillar of the company, department store business revenue was RMB 1.623 billion, down 14.14% year over year. Although large-scale integrated supermarkets’ main business revenue reached RMB 2.116 billion, up 5.70%, their gross margin was only 18.51%, down 0.59 percentage points from the previous year.

“The supermarket format increases revenue but not profit,” together with the shrinking department store business, highlights Ginza Holdings’ weakness in core operations. From a regional performance perspective, its base business also shows signs of loosening. Shandong Province’s main business operating revenue was RMB 4.114 billion, down 2.46% year over year. Meanwhile, expansion outside the province also suffered setbacks: in Hebei Province and others, operating revenue was RMB 56.0433 million, down 39.63% year over year.

High leverage plus goodwill impairment—can REITs issuance help untangle the issue?

In addition to troubles caused by the decline in profitability of its main business, high leverage and goodwill impairment have also cast a heavy shadow over Ginza Holdings’ financial condition.

The annual report shows that by the end of 2025, Ginza Holdings’ short-term borrowings reached RMB 2.373 billion, which places higher demands on the company’s cash flow and working capital turnover. Within these short-term borrowings, pledged borrowings were RMB 1.137 billion, guaranteed borrowings were RMB 0.932 billion, and letter of credit financing was RMB 0.3 billion.

Goodwill impairment is also one of the important reasons that led to asset impairment losses and profit damage during the reporting period. In 2025, because the recoverable amount of the overall asset group of Shijiazhuang Dongfang City Plaza Co., Ltd. was less than the fair value of the tangible assets of the overall asset group plus the amount of goodwill, Ginza Holdings recognized goodwill impairment provisions of RMB 14.3292 million for Shijiazhuang Dongfang City Plaza Co., Ltd.

Against the macro backdrop of intensifying competition in the retail industry and changes in consumption structure, as well as the company’s real-world pressure from high leverage, Ginza Holdings is attempting to find an exit by securitizing assets.

During the reporting period, Ginza Holdings’ 11th meeting of the 13th session of the board of directors and its 2024 annual general meeting of shareholders approved the “Proposal on Carrying Out the Filing and Issuance of Publicly Offered Infrastructure REITs.” The company plans to file and issue publicly offered infrastructure securities investment funds based on the Harmon Square Shopping Center held by Shandong Ginza Property Co., Ltd., its wholly owned controlling subsidiary.

A reporter from The Economic Daily noticed that the core purpose of this move is to innovate its operating model and activate existing stock assets. At present, the relevant proposals have already been approved by the general meeting of shareholders, and the company is continuously advancing communication with relevant regulatory authorities.

However, in its annual report risk disclosures, Ginza Holdings is also clear-eyed in pointing out that competition in the retail industry has gone beyond traditional boundaries, showing characteristics of being all-round, multi-layered, and high-frequency iteration. “Online platforms, leveraging advantages in traffic, data, and technology, are continuously deepening the shaping of consumers’ shopping habits. Models such as live-stream e-commerce, social e-commerce, and instant retail are constantly diverting offline passenger flow and intensifying price competition.”

In such a harsh commercial real estate and retail environment, whether REITs filing and issuance can be carried out smoothly, and whether the raised funds can truly and effectively ease debt pressure and give back to the core business—so as to help Ginza Holdings completely shed the ‘swollen by illusion’ look of its performance—remains full of uncertainty for now.

Daily Economic News