Yushu Technology (688836) investor relations material

Executive summary

• Q3 revenue rose 69.93% YoY to RMB 665.0m, while net income attributable to shareholders fell 17.37% to RMB 112.7m; 9M revenue increased 55.71% to RMB 1.817bn and net income reached RMB 386.7m.

• 9M net income growth reflected higher revenue and gross profit, as well as a prior-year one-time large share-based payment expense.

Financial highlights

• Q3 adjusted net income was RMB 105.0m, down 17.42% YoY; 9M adjusted net income was RMB 349.0m, down 18.78% YoY.

• 9M total profit rose 143.05% YoY to RMB 412.9m; reported net income increased 270.54% to RMB 386.7m.

• 9M operating cash flow declined 54.69% YoY to RMB 193.7m, as payments for purchases, labor, employees, selling and R&D expenses increased.

Key financial ratios and metrics

• 9M basic and diluted EPS were RMB 1.05, up 265.82% YoY; Q3 EPS was RMB 0.30, down 20.32% YoY.

• 9M weighted average ROE was 11.19%, up 5.19 percentage points YoY; Q3 ROE was 2.30%, down 3.47 percentage points.

• 9M R&D spending rose 191.48% YoY to RMB 262.9m, equal to 14.47% of revenue, up 6.74 percentage points. Q3 R&D rose 249.58% to RMB 127.0m.