Did Tencent "save" Seven Wolves?

(Text by Huo Dongyang, Edited by Zhang Guangkai)

A men’s clothing company has quietly become the most fund-like listed enterprise in its annual report.

On April 2nd, Qipilang (002029.SZ) released its annual performance: operating revenue of 3B yuan, down 4.35% year-on-year; net profit attributable to parent of 333 million yuan, up 16.91% year-on-year.

At first glance, the revenue decline is in single digits, and net profit has doubled, which seems decent. But peeling off the net profit layer, the core figures are shocking, with non-recurring net profit attributable to parent at only 9.6153 million yuan, a plunge of 86.91% year-on-year.

It is worth noting that in this financial statement, Qipilang included a paragraph: “In the past three accounting years, the lower of net profit before and after deducting non-recurring gains and losses has been negative, and the latest year’s audit report indicates there is uncertainty about the company’s ability to continue as a going concern.”

Less than 10 million yuan is the real profit Qipilang earned from selling clothes in 2025. The “net profit attributable to parent” of 3.33 billion yuan that it publicly claims is intertwined with over 320 million yuan of non-recurring gains and losses.

Where does that money come from? The answer is in the investment section of the annual report, which shows fair value changes and disposal gains from a basket of blue-chip stocks.

This wolf sustains its brand by speculating in stocks.

A Suit-Wearing “Financial Wolf”

Reading Qipilang’s financial report requires looking at two profit statements simultaneously: one is the official consolidated income statement, and the other is the real operating performance after excluding financial investment income.

The gap between the two constitutes the entire logic for understanding the company’s current situation.

“Fair value changes and gains/losses from disposal of financial assets and liabilities” contribute the majority of profits. Several media outlets have pointed out that compared to the “jacket expert,” Qipilang now resembles a professional “stock trading company.”

The financial structure where non-recurring gains and losses contribute to profit is not new. In 2024, the combined investment income and fair value change gains accounted for over 82% of net profit attributable to parent.

By the end of 2025, Qipilang’s trading financial assets reached 2.82B yuan, accounting for 28.07% of total assets, up from 1.9B yuan at the start of 2025. The company explained that this was mainly due to increased investment in trading financial assets during the reporting period and rising fair value of held stocks.

What exactly is Qipilang investing in?

The holdings are almost a “blue-chip stock list”: Tencent Holdings, Hang Seng ETF, Ping An of China, China Property & Casualty, China Mobile, China Shenhua, CATL, plus some asset management plan products.

Among them, Tencent Holdings alone brought in 118 million yuan in profit for Qipilang in 2025.

This deployment is not aimless capital scattering but a “proactive hunting” with clear intent.

From the holding logic, its investment coordinates are precisely anchored in “high dividend + low valuation” state-owned and central enterprise core holdings, supplemented by aggressive positions in top Hong Kong tech stocks. This highly professional allocation indicates the company is no longer content with earning interest but is seeking excess returns.

A deeper signal is that the normalized authorization of up to 2 billion yuan has moved this expenditure beyond the traditional “idle funds management” category. As securities investments evolve from occasional safe havens to institutionalized long-term strategies, they have effectively become another “invisible second main business” outside the company’s core operations.

In other words, stock trading is not Qipilang’s “side business,” but a systematized, scaled, and routine capital operation strategy. However, this strategy has never been officially incorporated into the company’s external narrative.

In external communication, it still remains the “jacket expert.”

The Retreat of the Men’s Wear Main Business

Disregarding the investment perspective, the numbers for the men’s clothing main business are not optimistic.

In 2025, Qipilang’s non-recurring net profit attributable to parent was only 9.61 million yuan, compared to 73.47 million yuan in the same period of 2024. In just one year, the profitability of its core business evaporated by 80%.

The decline to 961,000 yuan in non-recurring net profit indicates that the clothing business’s actual profitability can no longer support even a single quarter of normal operations.

Specifically, in 2025, Qipilang’s operating revenue reached 2.89B yuan, down 4.35% from 2024. Its apparel segment revenue was 1.06B yuan, accounting for 96.28% of total revenue, a decrease of 4.27% year-on-year. The company’s flagship outerwear products generated 795 million yuan, representing 26.46% of revenue, down 5.64%.

During the period, online sales revenue reached 1.063 billion yuan, down 7.36%, accounting for 35.40% of total revenue; offline sales reached 1.94 billion yuan, down 2.62%, making up 64.60%.

In terms of offline channels, 2025 data shows 91 new franchise stores opened and 127 closed; 54 new direct (including joint operation) stores opened and 116 closed. Although the company stated that some closures were due to channel adjustments, with some franchise stores converting to direct stores, the number of new stores still lagged behind the closures.

This may be related to the broader context of the men’s wear market.

The Chinese men’s wear market has entered a stock competition phase, with clear segmentation: high-end brands are dominated by a few international brands, mid-tier brands are eroded by cost-effective emerging brands and white-label products.

Qipilang’s position in the mid-to-high-end casual men’s wear segment is precisely in the most fiercely competitive layer. On one side, Anta and Li Ning are diverting consumers with sports and leisure; HLA leverages scale to lower prices; younger DTC brands continue to chip away at market share through scene-based and aesthetic appeal.

The “jacket expert” brand positioning is not without reason, but in execution, it appears insufficiently forceful.

One data point that is easily overlooked amid the noisy financial figures is R&D expenses. In 2025, R&D costs were 324.1 million yuan, down 44.95% year-on-year, further decreasing by over 6 percentage points compared to the first three quarters’ 38.52%.

The sharp decline in R&D spending coincides with the rise in net profit. In other words, the company is reducing investment in its core business while maintaining profitability through financial gains.

In the short term, this does not impact the stock price; in the long term, it is a reverse indicator of brand strength. A men’s wear brand without sustained product investment will eventually lose its dialogue with consumers at the retail end.

A clear category strategy requires continuous delivery in product innovation, retail presentation, and content marketing—not just slogans. There remains a significant gap between Qipilang’s actual execution and its category focus.

From a financial structure perspective, Qipilang’s current situation can be described as: financial investments are the trunk, the men’s wear main business is the limb. The trunk is growing, the limb is shrinking, and the overall stance still stands, but the center of gravity has shifted.

Is the End of Men’s Wear in Finance?

Qipilang reveals a structural dilemma common among traditional Chinese consumer goods companies: when the main business stagnates and management holds large cash reserves, there is immense pressure on capital allocation.

Theoretically, these funds can go three ways: reinvestment into R&D and channels, returning value to shareholders (dividends or buybacks), or investing in financial assets. Qipilang is pursuing all three, but resource allocation increasingly favors the third.

Once this structure forms, it creates a self-reinforcing inertia.

Investment income offsets marginal profit losses in the main business, reducing urgency for transformation; meanwhile, delays in transforming the core weaken brand competitiveness at the consumer level, leading to further revenue decline and greater reliance on investment gains to fill the gap.

This is a slow, ongoing negative cycle that gradually erodes brand assets.

In the men’s wear sector, Qipilang is not the only “investment-loving” company.

Yageer and Jiumuwang have also followed similar structural paths. Yageer later completed a “dual-core” transformation narrative through real estate, but at the cost of brand clarity. Jiumuwang has long oscillated between its self-perception as an “elite men’s wear” brand and the market’s actual feedback.

Qipilang’s current trajectory is quite similar to theirs, but with more aggressive financial asset allocation and more pronounced core business decline.

Qipilang’s brand assets still hold value. The “jacket expert” label has historical depth, and the record of “Qipilang jackets” maintaining the largest market share in similar products for over twenty years is a rare long-term achievement among Chinese consumer brands.

This wolf has run before.

The question is, where is it running now?

When a company’s non-recurring net profit drops to 9.61 million yuan, its financial assets approach 80% of annual revenue, and R&D investment halves year-on-year, this is no longer just an ordinary statement of “main business pressure,” but a deep business identity crisis.

Qipilang is becoming a hybrid company with clothing as a shell and financial investments as its core—yet this fact has never been officially acknowledged.

From shareholders’ perspective, 333 million yuan in net profit and a dividend of 1 yuan per 10 shares seem financially respectable.

But from an industry perspective, the company is in a dangerous balance. The men’s wear business sustained by investment returns is like a noble maintained by a ventilator.

If in 2026 there are no windfall gains from asset disposals, and if a black swan hits the capital market, how much resilience does Qipilang, with only about 9 million yuan in non-recurring net profit, really have to withstand the storm?

If Qipilang truly wants to become a wolf again, it must make a clear choice: either explicitly declare its dual-core strategy, clarify its investment logic and capital boundaries like Yageer, or treat investment returns as a “blood transfusion” to genuinely pursue brand youthfulness, rather than repeatedly papering over hollowed-out financial reports with floating gains.

Both paths are difficult. But doing nothing is the most dangerous.