Recently, the 2025 annual financial report released by Aokang International (603001.SH) revealed a sluggish performance, with both operating revenue and net profit attributable to parent company declining year-on-year, marking the company’s fourth consecutive year of operating losses. The sports brand agency business, once strategically positioned as the second growth curve to diversify its business layout, has completely collapsed. All Skechers franchise stores under the company have been permanently closed, and only 7 Puma stores remain operational. Currently, Aokang International has fully withdrawn from the sports brand agency track and returned to a single-brand development model relying solely on its core self-owned shoe brand, bearing dual pressures of fierce industry competition and performance turnaround.

Official financial data shows that Aokang International’s operating performance deteriorated significantly in 2025. The company achieved an annual operating revenue of RMB 1.924 billion, a year-on-year decrease of 24.23%. Its net profit attributable to parent company recorded a loss of RMB 241 million, with the loss scale further expanding. The cumulative loss over the past four years has exceeded RMB 900 million, reflecting mounting operational pressure. The company attributed its weak performance to sluggish macroeconomic conditions, weakening consumer demand, and intensified structural differentiation in the footwear and apparel industry. Affected by these adverse factors, the company’s gross profit margin dropped sharply by 6.99 percentage points year-on-year to 34.88%, resulting in a continuous contraction of profit margins.

Notably, Aokang International temporarily turned losses into gains in the first quarter of 2026, achieving a net profit of RMB 25.3899 million attributable to the parent company. However, this marginal improvement was not driven by fundamental upgrades in its core business, but mainly by increased fair value change gains, which is a one-off non-recurring profit. The market responded negatively to the lack of substantive business improvement, triggering a 5.52% drop in the company’s stock price on the trading day.

In terms of core business, Aokang International’s traditional leather shoe business continues to shrink with declining market competitiveness. In 2025, the sales volume of men’s shoes and women’s shoes decreased by 11.00% and 11.04% year-on-year respectively, and the revenue decline of both categories exceeded 23%. Industry analysis indicates that consumer group iteration is the core driver of the downturn. As Generation Z has become the main consumer force, traditional business leather shoes have been marginalized by trendy and comfortable sports and casual shoes with broader application scenarios. To cut operating costs and optimize offline store layout, the company closed a total of 767 physical stores throughout 2025, including 566 stores of its core self-owned brand.

To break the growth bottleneck of its traditional business, Aokang International actively expanded the sports brand agency business years ago as its key second growth curve. After signing the Skechers agency agreement in 2015, the company planned to open more than 1,000 stores within five years to tap into the booming sports consumer market. Nevertheless, the layout ended in total failure. In 2025, the revenue of its Skechers agency business plummeted by 55.45% year-on-year, with all offline stores shut down completely. Meanwhile, only 7 Puma agency stores were left in operation, meaning the overall sports agency business suffered a comprehensive defeat. With the complete collapse of its second growth curve, Aokang International has returned to a single independent brand operation mode. Against the backdrop of intensifying competition in the domestic footwear industry and continuous upgrading of consumer demand, Wang Zhentao, the actual controller of the company, is facing enormous operational challenges, and it is urgent for the enterprise to reverse the long-term loss situation and rebuild growth momentum.