Aeon’s revenue declined by over 3% last year, with liquidity under pressure and relying on the parent company for support.

Ask AI · Can support from the parent company help relieve cash flow liquidity pressure?

On March 26, Aeon (Hong Kong) Department Store Co., Ltd. (hereinafter “Aeon,” 0984.HK) released its 2025 annual financial report. In 2025, Aeon’s revenue was HK$7.795 billion, down 3.71% year over year. Revenue declined for three straight years, although last year’s decline rate was somewhat narrower; net loss was HK$324 million, with losses narrowing by 4.06%.

Aeon’s controlling shareholder is Aeon Co., Ltd., a Japanese retail giant. Since it began expanding its business in Hong Kong in 1985 and in Guangzhou in 1996, it currently operates more than 350 stores of various business formats in China, covering multiple areas including comprehensive department stores and supermarkets, food supermarkets, integrated finance, commercial real estate development, services, specialty stores, and functional companies.

As the listed entity in Hong Kong, Aeon’s core revenue includes only comprehensive department store supermarkets and food supermarkets in Hong Kong and Guangdong. In its financial report, the “Mainland” business refers to its Guangdong operations. In 2025, Aeon’s revenue in Hong Kong was HK$3.592 billion, down 4.11% year over year; operating loss was HK$192 million, narrowing by 33.33% year over year. “Mainland” revenue was HK$4.203 billion, down 3.36% year over year; operating loss was HK$150 million, widening by 142.54% year over year. In fact, since 2018, Aeon’s revenue in the Guangdong market has been declining continuously, and it has also been losing money throughout.

In its financial report, Aeon attributes the decline in revenue more to the economic environment, changes in consumer behavior, and industry competition. In the Hong Kong market, in 2025, Aeon responded through opening smaller specialty stores, digital transformation, and merchandise reform. It disclosed that last year, its small specialty stores such as DAISO Japan and AEON Mono Mono opened in Hong Kong have flexible store locations, lower overall operating costs, and lower rents. Coupled with the group’s high value-for-money product assortment, this is expected to help drive performance and profitability. In addition, in 2025, its sales of private brands in Hong Kong increased by more than 21% year over year.

In Guangdong, in 2025, Aeon opened eight new stores—five in Guangzhou, and the other three located in Shenzhen, Foshan, and Jiangmen—while it also renovated three stores in Foshan, Dongguan, and Guangzhou.

Aeon did not disclose the number of stores it owns in its financial report. According to Aeon’s official website, as of March 29, it had 44 stores in Guangdong. Aeon’s retail brands in Hong Kong are more diverse; besides Aeon, there are also Daiso Japan, Mono Mono, KOMEDA’S Coffee, and other segmented format brands. As of March 29, Aeon had 82 stores in Hong Kong, including 22 Aeon stores (including 9 momo stores).

In addition to performance pressure, Aeon’s cash flow liquidity is still tight. In 2025, it recorded a net loss of HK$354 million. Net cash outflow under operating activities and lease liabilities was HK$255 million, and net current liabilities were HK$1.56 billion. It still owes a total of HK$545 million in loans to its controlling shareholder, Aeon Japan; of this, HK$65.63 million will mature in June 2026, and HK$479 million will mature in February 2027. Aeon stated that its own cash flow and assets cannot cover daily operating and debt repayment needs, and that continued operation depends on financial support from its controlling shareholder.

Aeon stated that these circumstances indicate that it has significant uncertainty and may raise major doubts about the Group’s ability to continue as a going concern. At the same time, it also pointed out that Aeon’s board of directors has reviewed the cash flow forecasts for the next 12 months, and emphasized that the parent company has confirmed that it will provide financial support. It believes it can fulfill its financial obligations due by the end of December 2026.

Looking ahead to 2026, Aeon plans to continue accelerating the expansion of small specialty stores in Hong Kong and open 10 AEON Mono Mono stores. In Guangdong, it plans to open another three food supermarkets. Earlier, media reported that Aeon planned to roll out discount stores in Guangdong and Hong Kong, with discount store prices 10–15% lower than traditional supermarkets, and to open three discount store outlets within the fiscal year ending February 2027. However, in the latest financial report, Aeon did not mention the discount store plan.

Regarding the continued decline in revenue in the Guangdong market, on March 29, a reporter from Nandu Bay Finance & Society contacted Aeon via official email. As of the time of publication, no reply had been received.

Nandu·Bay Finance & Society reporter Zhan Danqing