Changjiu Holdings (6959) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 17.1% YoY to RMB641.8m; profit increased 6.7% to RMB102.3m, while net profit margin declined to 15.9% from 17.5%.

• Adjusted net profit, adding back listing and share-based compensation expenses, increased 57.6% to RMB154.4m from RMB98.0m.

Financial highlights

• Gross profit increased 25.6% to RMB282.7m; gross margin was 44.0%, compared with 41.1% in 2022.

• Operating profit was RMB120.2m versus RMB130.9m; G&A expenses rose 86.4% to RMB143.5m, mainly due to listing costs, higher staffing and share-based compensation.

• Basic and diluted EPS were RMB0.6762 and RMB0.6751, up 5.8% and 5.6%, respectively, YoY.

Outlook and guidance

• Priorities include improving pledged vehicle monitoring services, developing an integrated automobile sales and distribution support system, expanding dealership management capacity, and growing foreign and smart businesses.

• Proceeds are intended to fund service and technology upgrades, R&D, dealership management, marketing and working capital; full utilization is expected by end-2026 for specified business allocations.

• Management expects demand for pledged vehicle monitoring services to support planned development and aims to expand dealership management while improving service quality.