Youngor completes generational handover; Li Hanqiong takes over 34 billion yuan market value.

On the evening of May 21, Youngor Fashion Co., Ltd. (600177.SH) completed a board reshuffle at its 2025 annual shareholders meeting. The 49-year-old Li Hanqiong was elected as a non-independent director and subsequently elected as chairman and president, while the 75-year-old founder Li Rucheng will completely withdraw from daily operational decisions after his term ends.

This personnel change marks the substantive generational handover of this veteran clothing giant, which is valued at around 34 billion RMB.

Behind the power transition, Youngor is undergoing a deep restructuring of its asset structure and is under pressure. From a financial and capital operation perspective, the new leader inherits a complex situation that is highly dependent on investment income, with its core business deeply stuck in the predicament of “revenue growth without profit growth.”

Youngor has long maintained a three-pronged capital model of “clothing, real estate, investment,” but in the recently disclosed 2025 fiscal year, the diversification among business lines has shown extreme inversion.

The income statement is highly dependent on financial investments.

In 2025, Youngor achieved a total operating income of 11.582 billion RMB, a decrease of 18.37% year-on-year, and net profit attributable to shareholders of 2.447 billion RMB, a decrease of 11.57% year-on-year.

Among these, the investment business contributed a net profit attributable to shareholders as high as 2.471 billion RMB for the whole year, with the profit from a single business directly exceeding the company's total net profit. This gain mainly comes from holding dividends from underlying assets such as CITIC Holdings and Ningbo Bank, as well as cashing out by reducing holdings.

The core business's capacity for generating profit has declined. In contrast, the “fashion business,” which the company has recently announced a high-profile return to, has seen its profitability shrink considerably. Despite a slight revenue increase of 9.33% to 7.433 billion RMB in the fashion segment, driven by capital moves like the consolidation of French children's clothing brand BONPOINT, the segment’s net profit attributable to shareholders was only 95.93 million RMB, plummeting 77.75% year-on-year. Additionally, the real estate business shifted from profit to a loss of 106 million RMB due to declined scale of tail-end transfers and provision for inventory write-downs.

These figures show that Youngor’s current profit maintenance is still built on returns from financial assets; its attempt to rely on the clothing real economy for self-sustaining profitability has not formed a closed loop.

The collapse in profits from the fashion business points directly to its rough transformation cost structure and inefficient asset turnover.

From an expense perspective, Youngor’s sales expenses in 2025 reached 3.578 billion RMB, rising 13.30% year-on-year, accounting for over 30% of total revenue. Management expenses also rose to 958 million RMB due to the added costs of operating overseas brands and mergers and acquisitions. The multi-brand matrix established through direct acquisitions has not achieved synergistic scale profitability in the short term, and high channel and marketing spend has directly eroded gross profit margins.

In terms of capital actions, Youngor has entered a stage of both passive and proactive de-financialization.

During 2025, the company exited 4 financial investment projects, recovering 7.714 billion RMB in cash; the book value of securities held at the end of the year dropped sharply from 8.829 billion RMB at the beginning of the year to 5.648 billion RMB. Meanwhile, the real estate business entered substantive liquidation, with no new projects launched for the year and pre-sale house payments down by 2.909 billion RMB at year-end.

By liquidating financial assets, Youngor has recovered enormous liquidity at the financial level, but it remains unknown how this massive fund can effectively be invested into the fashion industry and converted into substantive capital returns.

Li Hanqiong previously led Youngor’s renaming to “Fashion Group” and several overseas brand acquisitions, making him the actual operator behind the company’s strategic shift toward a multi-brand matrix. After taking over, his core financial task has shifted from the earlier focus on “expanding the balance sheet” to “improving asset turnover efficiency per store and per brand.”

With real estate in full liquidation and financial investment being continually scaled down, Youngor’s decade-old mechanism of “using investment income to smooth out main business fluctuations” is coming to an end.

In the next two to three fiscal years, the consolidated financial statements, devoid of financial gains for embellishment, will expose the real profitability of the fashion business with no cover.

If the company cannot effectively curb the marginal diminishing effect of sales expenses and facilitate financial integration after acquiring brands, this veteran giant will face strict valuation restructuring in the capital market.

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