Feiyang International Holdings Group Limited (Feiyang Group, 01901) reported interim results for the six months ended 30 June 2026:
1. Core financials • Revenue slid 19.7% year on year (YoY) to RMB 410.46 million, primarily due to a RMB 126.25 million contraction in gross sales of free independent traveller (FIT) products. • Gross profit declined 4.18% to RMB 26.17 million; gross margin improved to 6.4% from 5.3% a year earlier, reflecting a more profitable sales mix. • Net profit increased 7.35% to RMB 6.61 million, supported by a RMB 16.85 million reversal of impairment losses on financial assets and lower finance costs. • Basic earnings per share fell to RMB 0.67 cent (1H 2025: RMB 0.80 cent) after share-base expansion. No interim dividend was declared.
2. Business mix shift • Package-tour revenue rose 15.0% to RMB 218.62 million, now 53.3% of group turnover (1H 2025: 37.2%), as demand for structured domestic itineraries strengthened. • Gross sales of FIT products dropped 39.9% to RMB 190.14 million, reflecting strategic de-emphasis on low-margin ticket-only sales. • Ancillary travel services contributed RMB 1.73 million, down 40.6% YoY. • Information-system development services recorded no revenue (1H 2025: RMB 0.87 million).
3. Cost and expense dynamics • Cost of sales fell 20.6% to RMB 384.29 million, in line with softer FIT volumes. • Selling and distribution costs rose 26.7% to RMB 18.58 million, driven by higher staff expenses linked to early-stage deployment of AI-enabled sales tools. • Administrative expenses increased 6.6% to RMB 13.84 million. • Finance costs decreased 25.9% to RMB 3.43 million, benefiting from lower effective interest rates.
4. Balance-sheet highlights • Cash and cash equivalents totalled RMB 35.51 million; pledged deposits stood at RMB 33.37 million. • Interest-bearing bank and other borrowings amounted to RMB 195.53 million, all classified as current. • Net debt reached RMB 344.85 million, keeping the gearing ratio at 88%. • Current ratio remained at 1.0x. • Capital commitments for investment projects were RMB 42.90 million. • No significant contingent liabilities or post-balance-sheet events were reported.
5. Strategic initiatives Feiyang Group is accelerating integration of artificial-intelligence tools across product design, customer service and marketing. A newly launched AI-enabled Online Private Consultant (OPC) community platform targets the fast-growing senior (“silver-haired”) outbound tourism segment, aiming to deliver personalised travel experiences while reducing operating costs. The company is also exploring synergies between AI applications and its digital cultural-tourism assets.
6. Outlook remarks from management Management remains optimistic on China’s domestic tourism rebound, citing a 5.4% rise in national tourist trips and supportive government policies in 1H 2026. Priority areas include continued product-mix optimisation toward higher-margin offerings, ongoing cost control, and disciplined investment in AI capabilities to enhance efficiency and service differentiation.
7. Capital actions and share options • In August 2025 the company raised HKD 32.80 million via a private share placement; proceeds have been fully allocated to digital-asset development and working capital. • As of 30 June 2026, 133.2 million share options were outstanding (13.34% of shares in issue); no options were exercised during the period.
Feiyang Group’s results underscore a strategic pivot from commoditised FIT sales toward higher-margin package tours and technology-driven service enhancements, allowing modest profit growth despite a significant top-line contraction.