Baiwen Achieves Second-Highest August Revenue, Expects Significant Growth in Profit Margins

Fitness chain operator Baiwen (8462-TW) announced August consolidated revenue of NT$6.22 billion, down 0.56% month-on-month but up 16.75% year-on-year, setting a new historical second-high record, second only to last month. Analysts are optimistic about third-quarter earnings. Baiwen expects new stores in Taoyuan, Taichung, Kaohsiung, Taipei, and Tainan to open in the fourth quarter, anticipating continued revenue growth in the second half of this year and into next year. With economies of scale expanding, gross margins and operating profit margins are expected to increase significantly each quarter.

Baiwen's first eight months of revenue totaled NT$46.5 billion, up 19.49% year-on-year, setting a new high for the same period. 'Fitness and Entertainment Services' revenue was NT$28.8 billion, up 21.06% year-on-year, also setting a new high for the same period, accounting for nearly 62% of total revenue. 'Sports Health Services' revenue was NT$16.12 billion, up 17.07% year-on-year, also setting a new high for the same period, accounting for nearly 35% of total revenue.

Baiwen explained that August's revenue was slightly lower than the previous month due to three weeks of continuous heavy rain in southern Taiwan, which affected the execution of coaching courses. However, the number of Health Factory members continues to grow. As the Taiwanese fitness market continues to expand, competitors such as Quanzhen Fitness withdrew 12 stores last year, and in September this year, BEING sport and BEING fit also terminated services at 9 locations. Baiwen is optimistic, noting that the trend of market consolidation by major players is becoming more apparent. Its core brand, 'Health Factory,' as the largest local fitness brand in Taiwan, is quickly expanding its market share, holding a long-term bullish advantage.

Health Factory plans to expand at least 9 new stores this year, bringing the total number of locations to over 90. The 100th store is scheduled to open in 2027. Baiwen states that it has entered a period of rapid growth, leveraging 'continued growth in same-store sales,' 'new store momentum,' and 'increased secondary consumption by members' to drive profitability. With economies of scale becoming apparent, profitability is expected to grow at a stronger rate than revenue, with gross margins and operating profit margins set to increase significantly each quarter.