Fangzhou (6086) H1 2024 earnings summary

Executive summary

• H1 revenue rose 2.5% YoY to RMB1,322.8m and gross profit increased 7.5% to RMB265.5m; reported net loss widened to RMB818.7m, while adjusted net profit rose 395.0% to RMB15.1m.

• Registered users reached 45.6m, with 8.9m average MAUs over the 12 months ended June 30, 2024; registered physicians numbered ~217,000.

Financial highlights

• Revenue was RMB1,322.8m versus RMB1,291.0m; cost of sales was RMB1,057.3m versus RMB1,044.0m.

• Gross margin expanded to 20.1% from 19.1%; adjusted net profit margin was 1.1% versus 0.2%.

• Operating loss was RMB746.3m versus RMB80.8m, and net loss was RMB818.7m versus RMB153.9m; basic and diluted loss per share was RMB1.27 versus RMB0.28.

• Net cash generated from operating activities was RMB31.4m versus RMB30.2m; cash and cash equivalents were RMB138.4m at June 30, 2024.

Outlook and guidance

• H2 priorities include strengthening physician-patient engagement, growing high-quality users, broadening products and supply-chain partnerships, and recruiting healthcare, AI and technology talent.

• Plans include expanding specialties such as cardiology, neurology, infectious disease, dermatology, psychiatry and gynecology, and using AI tools to improve physician efficiency.

• Sufficient H2 2024 working capital is expected, supported by anticipated operating cash-flow improvement, working-capital management, supplier credit terms and IPO proceeds.

• 2024 capital spending is expected to fund property, equipment and intangible assets, primarily from cash balances.